Preamble

The House met at a Quarter before Three of the Clock, MR. SPEAKER in the Chair.

PRIVATE BUSINESS.

Private Bills [Lords] (Standing Orders not previously inquired into complied with), —MR. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the following Bills, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into, which are applicable thereto, have been complied with, namely:

Shoreham-by-Sea Urban District Council Bill [Lords]

East Ham Corporation Bill [Lords],

Dover Gas Bill [Lords].

London Electric Tramways Bill [Lords].

Ordered, That the Bills be read a second time.

Sunderland Gas Bill [Lords],

Read the third time, and passed, with Amendments.

Manchester Corporation Bill, As amended, considered.

Ordered, That Standing Orders 223 and 243 be suspended, and that the Bill be now read the third time—[The Chairman of Ways and Means]

Bill accordingly read the third time, and passed.

Blackpool Improvement Bill [Lords],

Pallin's Divorce Bill [Lords],

Read a second time, and committed.

Oral Answers to Questions — POLAND (TREATMENT OF JEWS).

Lieut. - Commander KEN WORTHS: 1.
asked the Secretary of State for Foreign
Affairs whether he has now received a Report from the British Minister in Warsaw respecting the Anti-Jewish pogrom in Vilna and Pinsk; whether the British Minister's Report is based upon his own personal investigations in those cities or upon the personal investigation of other British officers; whether Jewish representatives were freely permitted in both cities to make statements on the outrages, or whether statements were accepted only from Polish representatives; and whether His Majesty's Government will publish the full text of the Report received from Warsaw?

The UNDER-SECRETARY Of STATE for FOREIGN AFFAIRS (Mr. Cecil Harmsworth): The full Report on the treatment of Jews in Poland which His Majesty's Minister was instructed to prepare has not yet been received. A number of interim telegraphic reports have been received, but I think it would be more satisfactory to await the detailed statement which we are expecting than to-lay Papers now.
I might add that we are asking the United States Government whether they would be willing to allow a representative of His Majesty's Government to be attached to the Special Mission of Investigation which they are stated in the Press to be about to send to Poland.

Mr. R. RICHARDSON: 7.
asked the Secretary of State for Foreign Affairs whether Admiral Kolchak's Government has issued an order which conscripts all Jews for the Infantry and forbids any Jew to hold a commission; whether the Propaganda Department of Admiral Kolchak's Government is directed by the Holy Synod at Omsk and is issuing incitements against the Jews, on the ground that Bolshevism is created and sustained by the Jews; and whether the representatives of His Majesty's Government in Russia and Siberia have been instructed to take steps to prevent the persecution of the Jews?

Mr. HARMSWORTH: I have no information in regard to the first or second parts of the hon. Member's question. I consider that the action attributed to Admiral Kolchak is unlikely to be founded on fact, having regard to a telegram recently dispatched by Admiral Kolchak to M. Sazonoff, the Foreign Minister representing the Omsk Government. In
that telegram Admiral Kolchak states that as he learns that the Jewish population in Russia is anxious in regard to its future, he considers it opportune to recall the views which he has frequently and publicly expressed. These views are to the effect that the Omsk Government is endeavouring to guarantee to all the peoples of Russia, without distinction of religion and nationality, complete equality before the law, which will safeguard the personal welfare of all citizens.
No special instructions have been sent to His Majesty's representatives at Archangel and in Siberia in regard to the possible persecution of Jews, and Admiral Kolchak's telegram suggests that it is unnecessary, but the hon. Member may rest assured that our representatives, will always use their influence in the direction which he indicates.

Oral Answers to Questions — CZECHO-SLOVAK EEPUBLIC.

Lieut.-Colonel Sir SAMUEL HOARE: 2.
asked the Secretary of State for Foreign Affairs whether a Minister has been appointed to the Czecho-Slovak Republic?

Mr. HARMSWORTH: No, Sir; not yet. His Majesty's Legation at Prague is at present in charge of Mr. Cecil Gosling as His Majesty's Charge d' Affaires.

Sir S. HOARE: When is the appointment likely to be made? I have asked this question before.

Mr. HARMSWORTH: The matter is being carefully considered.

Sir S. HOARE: Will the hon. Gentleman be able to answer the question this day week?

Mr. HARMSWORTH: I should think so.

Oral Answers to Questions — NEW YORK CONSUL-GENERALSHIP.

Sir S. HOARE: 3.
asked the Secretary of State for Foreign Affaire whether a Consul-General has. been appointed to New York?

Colonel Sir HAMAR GREENWOOD (Department of Oversea Trade): I hope that it will be possible to make a very early announcement in regard to this appointment.

Sir H. HOARE: Will the hon. Gentleman be able to answer this question next Thursday?

Sir H. GREENWOOD: I hope to be able to give a definite answer then.

Oral Answers to Questions — NEAR EAST (BRITISH POLITICAL. REPRESENTATIVES).

Sir H. HOARE: 4.
asked the Secretary of State for Foreign Affairs whether political representatives have been appointed to South Russia, Sofia, and Vienna?

Mr. HARMSWORTH: As regards South Russia the appointment of a political, as distinct from a military or commercial, representative of His Majesty's. Government has hitherto been thought unnecessary, but is now receiving careful consideration. The hon. and gallant Member will remember that General. Denikin acknowledges the supremacy of Admiral Kolchak with whom His Majesty's Government already have a representative.
As regards representation in Bulgaria and Austria, I am unable to add anything to the reply which I returned on the 8th July.

Lieut.-Colonel GUINNESS: Is it the case that the absence of the Foreign Secretary in Paris is the reason why we can get no answers to these last three questions, and if so, how soon may we hope for a return of the power of decision?

Mr. HARMSWORTH: The hon. Member is not entitled to assume that.

Lieut.-Colonel A. MURRAY: Is there close communication between General Denikin and Admiral Kolchak?

Sir S. HOARE: Is not the Government of Archangel in exactly the same position as regards General Denikin as it is with Admiral Kolchak, and why should a Commission have been sent in one case and not in the other?

Mr. HARMSWORTH: The matter is under consideration.

Sir S. HOARE: If I put that question down on Thursday can I then have an answer. I put it down a week ago and got exactly the same reply as to-day?

Mr. HARMSWORTH: I will endeavour to have an answer by then.

Oral Answers to Questions — GERMAN MISSIONS (TRANSFERRED COLONIES).

Mr. R. RICHARDSON: 5.
asked the Secretary of State for Foreign Affairs whether he will state what steps were taken to consult the non-Christian natives in the areas where there were German missions, now transferred by the Peace Treaty to the Allies; whether in all cases of transferred missions the native converts and others were consulted; and with what results the inquiries were made?

Mr. ALFRED DAVIES: 6.
asked the Secretary of State for Foreign Affairs (1), whether the Clause in the Peace Treaty with Germany, Section 15, which provides for the transference and continuance of German religious missions, is operative in the case of both Roman Catholic and Protestant missions; how many mission stations, Protestant and Roman Catholic, respectively, have been or eventually will be transferred and come under the operation of this Clause;
(2)whether he will state how many missiosary societies have been maintaining religious missions whose missions come under the Clause in Section 35 of the Peace Treaty; how many mission stations in how many transferred or Allied territories will fall under the provisions of the treaty in this respect; whether he can state the number of missionaries formerly working in these mission stations; whether it is intended to exclude the missionaries formerly working in them from all further part in these missions; and whether any German subjects will be allowed to act as trustees or as workers in those missions after they have been transferred?

Mr. HARMSWORTH: It is impossible for me to answer these very comprehensive questions immediately. The necessary information is not at the moment in the possession of the Foreign Office, but I am taking steps to have it compiled, and I hope to be able to supply details at an early date.

Captain WEDGWOOD BENN: Is it the policy of the Government not to allow any scope for the activity of German Missions in the future?

Mr. HARMSWORTH: That scarcely arises out of the question on the Paper.

Oral Answers to Questions — BASLER MISSION, SWITZERLAND.

Mr. A. DAVIES: 8.
asked the Secretary of State for Foreign Affairs whether the Easier Mission, of Basel, Switzerland, has been treated as a German missionary society for the purpose of the Peace Treaty; whether toe Swiss Government or the Basler Mission has made any representations on this matter; and, if so, what was the purport and outcome of the representations made?

The UNDER-SECRETARY of STATE for the COLONIES (Lieut.-Colonel Amery): In view of their enemy connections and sympathies the Basle Mission and Basle Mission Trading Society in the Gold Coast were dealt with as enemy associations before the conclusion of Peace, and steps were taken to vest their properties in selected trustees to be administered on religious and philanthropic lines for the benefit of the natives. Representations have been made by the Swiss Government and the Trading Society with a view to obtaining a reversal of the action taken, but after full consideration the Government has seen no sufficient reason for modifying its decision. It is proposed to repay to the shareholders in the Trading Society their capital in full.

Oral Answers to Questions — RUSSIA.

BALTIC STATES (RUSSIAN COUNTER REVOLUTIONARY FORCES).

Lieut.-Commander KENWORTHY: 10.
asked the Secretary of State for Foreign Affairs if he has any official knowledge to the effect that the German General Vonder Goltz has joined the counter-revolutionary Russian forces in the Baltic provinces; and, if so, what stops it is proposed to take to safeguard the interests of our Esthonian, Latvien, and Livonian Allies in those regions?

Mr. HARMSWORTH: The attention of His Majesty's Government has been drawn to a Press report emanating from Berlin to the effect that General Von der Goltz had offered his services to the representative of Admiral Kolchak in Helsingfors, and that he was now acting as Chief of the Staff to Prince Lieven's Corps, but no official confirmation of this report is forthcoming.
Meantime, the Russian forces at Libau are under the orders of General Gough,
head of the British military mission to the Baltic States, so that the interests -of these States would seem to be adequately safe-guarded.

Lieut.-Colonel THORNE: Is the hon. Gentleman aware that the German Government in 1917 were responsible for sending Lenin and thirty companions into Russia, which has been the cause of all the trouble there?

MILITARY MISSION.

Lieut.-Commander KENWORTHY: 17.
asked the Secretary of State for War what post Lieut.-General Sir Hubert Gough, K.C.B., holds in the Eastern Baltic and what are his functions there; whether a British' officer has been appointed Governor of Riga; if so, what force, apart from the Royal Navy, is available to support his rule; and whether these two officers are under the direction of the Foreign Office or the War Office?

The SECRETARY of STATE for WAR (Mr. Churchill): Lieut.-General Sir Hubert Gough is Chief of the British Military Mission to Finland and the Baltic States. This Mission was sent out in consequence of the agreement arrived at with the other principal Allied and Associated Powers (the United States of America, France, and Italy), that the execution of Allied military policy shall be under British control. General Gough is responsible for carrying out the Allied policy decided on.
A British officer belonging to General Gough's Mission has been appointed temporarily as Military Governor at Riga. He is acting in co-operation with the Lettish Civil Governor, and being advised by the Chief British Commissioner to the Baltic States. This is a temporary arrangement to carry on the administration of the city and maintain order during the withdrawal of the Germans. The local forces of the Lettish Government are available to support this rule. General Gough and all the officers of his Mission are under the War Office.

GENERAL DENIKIN'S OPERATIONS.

Mr. R. RICHARDSON: 26.
asked the Secretary for War whether there are British military representatives attached to General Denikin's forces at the fronts; whether they are instructed to report on the treatment of the inhabitants, Bolshevik prisoners, and the troops under General Denikin's command; whether a British
officer of high rank at General Denikin's headquarters found projecting above the ground the heads of thirty men who had been buried alive; and whether he can state how many Bolshevik prisoners are at present alive in General Denikin's hands?

Mr. CHURCHILL: No British officers are actually attached to General Denikin's forces at the fronts, but from time to time officers visit formations in the field so as to maintain the closest possible liaison with them. As to the second part of the question, I have nothing further to add to the answer given to the hon. and gallant Member for Newcastle-under-Lyme on 2nd June. The answer to the third part is in the negative.
In reply to the last part, the Chief of the British Mission states that in the last twelve months General Denikin has captured over 200,000 prisoners. The majority are now fighting for General Denikin or working on the rearward services as free men, whilst a number of them are acting as mess waiters, cooks, grooms, etc., to the personnel of the British Mission. The only prisoners who are ever shot are those against whom criminal acts have been proved, and then only after fair trial by court-martial. These are usually Chinese, Letts, and other alien mercenaries.

Mr. HOGGE: Can the right hon. Gentleman say definitely what is our relationship to General Denikin's command? Have we, by the authority of this Government, British officers attending on his command.

Mr. CHURCHILL: Yes, Sir. We support General Denikin's operations by every means in our power, short of the dispatch of large fighting units from this country.

Mr. MacVEAGH: Can the right hon. Gentleman tell us what is exactly a. Bolshevik?

Oral Answers to Questions — SERBIA (ECONOMIC MISSION).

Mr. A. SHORT: 12.
asked the Undersecretary of State for Foreign Affairs if he will state what is the composition of the Joint Mission which is being sent out on behalf of the Department of Oversea Trade and the Commission Internationale de Ravitaillement to investigate conditions in Serbia; what are the business interests represented on this Joint Mission; whether the whole cost of the Mission will be borne by the Department and the Commission;
whether it has any powers to make recommendations to the Government with a view to legislation, as well as to the business interests of the country; whether a Report of its investigations will be published; whether he has sent out any other Mission of a similar nature; and whether he can give details of such Missions?

Sir H. GREENWOOD: I will have the names of the members of the Economic Mission to Serbia printed in the OFFICIAL REPORT. The Mission was sent in two contingents, of which the first has already returned, the object of the Mission being to investigate commercial conditions generally in Serbia and also reconstruction problems in engineering and public works, transportation, agriculture, timber, mining, town-planning, and sanitation. The official members of the Mission included no direct representative of any specific business interest. The first contingent of the Mission was, however, accompanied in an unofficial capacity by a representative of the Levant Company and a representative of the Associated British Manufacturers. The Mission was not intended to take the place of private initiative, but it is affording any facilities in its power to representatives in Serbia of British firms.
The expenses of the official members of the Mission are borne by the Commission Internationale de Ravitaillement. It has no power to make recommendations with a view to legislation. A Report of its investigations will be published on the completion of its work and an interim Report has already appeared in the "Board of Trade Journal" of 19th June.
A similar Mission was sent out to Poland by the Department of Oversea Trade and the Commission Internationale de Ravitaillement in the early part of the year. The Report of that Mission is at present under consideration.

Names of Members of Mission.

The Economic Mission to Serbia was sent out in two contingents. The first contingent consisted of (1) Mr. E. C. D. Rawlins, Commercial Secretary for Serbia and Greece; (2) Lieutenant-Colonel C. E. Jordan Bell, R.E., War Office; (3) Mr. F. A. Llewellyn, Office of Works; 4) Mr. W. Trask, nominated by the Federation of British Industries. This contingent was accompanied in an unofficial capacity by
Mr. A. E. Tabor, of the Levant Company, and Captain T. G. Mapplebeck, of the Associated British Manufacturers.

The second contingent consists of (1) Mr. F. A. Llewellyn, Office of Works; (2) Captain E. C. Foot, Forestry Corps of Canadian Army; (3) Mr. G. E. Farrar, Office of Works; (4) Mr. C. L. K. Foot, ex-Manager of Government Stock Farm at Alington; (5) Mr. F. H. Cerrito, Office of Works; and (6) Mr. G. W. Tully, Office of Works (Scottish Branch).

Mr. Rawlins was in charge of the Mission attached to it. Mr. F. A. Llewellyn has since been in charge.

Oral Answers to Questions — NATIONAL RESERVE.

Lieut.-Colonel GUINNESS: 13.
asked the Secretary of State for War whether it is proposed to reconstitute the National Reserve?

Captain GUEST (Joint Parliamentary Secretary to the Treasury): I would refer my hon. and gallant Friend to my reply on the 3rd March last to my hon. Friend the Member for South Kensington, to which I can add nothing at present. In the answer referred to I stated that the question of the future of the National Reserve must stand over until the policy regarding the size and general organisation of the after-war Army has been settled.

Oral Answers to Questions — TROOPS AT KARACHI.

Mr. HURD: 14.
asked the Secretary of State for War if he can now state the reply to his inquiries in India as to the health of the troops in the rest camp at Karachi; how many men are in hospital; what deaths, if any, have taken place owing to the heat; whether he is aware that the latest news from home received by soldiers there is dated January last; and whether their wives' letters are still being returned to England instead of being sent on to Karachi from Mesopotamia?

Mr. CHURCHILL: A Report has now been received, and I am informed that the health of the troops at the concentration camp at Karachi is fairly good. There are nearly 700 troops at the camp, and the number in hospital on the 4th July was twenty-three. There have been no deaths owing to the heat.
As regards letters, I am informed that immediately it was decided to retain in India demobilisable men from Mesopotamia orders were issued to intercept the English mails for such men at Bombay base post office. It is regretted that some delay was unavoidable in retrieving mails already en route to Mesopotamia or awaiting delivery in Mesopotamia. With regard to the statement that letters have been returned direct to England, I can only suggest that this was due to individual requests made by men on their departure from Mesopotamia.

Oral Answers to Questions — CANTEEN PROFITS.

Mr. HOGGE: 15.
asked the Secretary of State for War if he can now make a statement regarding the control and distribution of canteen profits?

The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Forster): I am not yet in a position to make an announcement as to the future organisation for dealing with canteen funds, but I hope to be able to do so at an early date.

Major WHELER: Are they now making profits to any extent out of these funds?

Mr. FORSTER: I have no reason to think the general canteen work is not making profits.

Major WHELER: Will not the hon. Gentleman consider the desirability of trying to reduce the charges of the articles, so that a profit shall not be made and the men shall get absolute value for their money?

Mr. FORSTER: That particular question is being considered.

Brigadier-General WIGAN: 16.
asked the Secretary of State for War if he can state approximately the amount of money now in the hands of the authorities arising from the profits from Army canteens, and if any decision has yet been come to as to the disposal of the same?

Mr. FORSTER: The only sum at present available is the Central Regimental Institutes Fund amounting to about £720,000. The profits of the Navy and Army Canteen Board are being used as working capital, and the surplus assets of the Expeditionary Force Canteens, which are being wound up, have not yet been definitely ascertained.

Oral Answers to Questions — SIR DOUGLAS HAIG.

Major CHRISTOPHER LOWTHER: 18.
asked the Secretary of State for War whether his attention has been called to a speech made by Field-Marshal Sir Douglas Haig at Newcastle, on 8th July, in which he made critical remarks as to the efforts of our Allies in the War; and whether he can see his way to advise officers on the active list to refrain in public speeches from making statements derogatory to our Allies and associates?

Mr. CHURCHILL: I have not seen any full report of the speech in question, but I am sure that there was no intention on the part of Sir Douglas Haig to depreciate the efforts of our Allies. Indeed, it appears from the summarised accounts that his object was simply to show how heavy was the burden successfully borne by the British Army.

Major LOWTHER: Will the right hon. Gentleman answer the second part of the question?

Mr. CHURCHILL: I think that part does not arise. I say I am sure there was no intention on the part of Sir Douglas Haig to depreciate the efforts of our Allies.

Major LOWTHER: Does the right hon. Gentleman not see that the second part of the question does not necessarily refer to Sir Douglas Haig, but is of general application?

Mr. CHURCHILL: I think it is quite unnecessary to issue any general instruction to officers not to make speeches which are derogatory to our Allies.

Oral Answers to Questions — OFFICERS (DISMISSAL).

Major FARQUHARSON: 19 and 20.
asked the Secretary of State for War (1) under what Section of the Army Act officers may be dismissed from the Army without sentence by court-martial; (2) how many officers of the Army, Navy, and Air Forces have been dismissed without court-martial as required by the Army Act and the King's Regulations?

Mr. CHURCHILL: There is no Section of the Army Act under which officers may be dismissed from the Service without trial by court-martial, and no officer of the Army or Air Force has been dismissed without such trial. But many officers have
been called upon to resign their commissions or to retire under the provisions of Article 527 of the Royal Warrant for Pay, etc., and a number have also been removed under the provisions of Article 529. No figures for the Army are available, and, in view of the labour involved in obtaining such statistics, I regret I cannot undertake to have them compiled. As regards the Air Force, twenty-eight officers have been removed from the Service under the provisions of Articles 525–527 of the Royal Warrant.
For information as to officers of the Royal Navy, I would refer my hon. and gallant Friend to my right hon. Friend the First Lord of the Admiralty.

Colonel ASHLEY: What is the difference between calling upon an officer to resign his commission and dismissing him?

Mr. CHURCHILL: The question asked under what Section of the Army Act. 1 explained that it was not under a Section of the Army Act, but under the Regulations of the Royal Warrant.

Colonel ASHLEY: Will the right hon. Gentleman answer my question, which is of considerable importance to many officers in the Army?

Mr. CHURCHILL: The practice which prevails is of long standing, and the distinction between cashiering an officer as the result of a court-martial and his removal from the list in certain circumstances, is perfectly well understood.

Lieut.-Colonel MURRAY: Is it not the case that many officers prefer to be called upon to resign rather than be court-martialled?

Mr. CHURCHILL: It depends. Some prefer to resign, and some to be court-martialled.

Major McKENZIE WOOD: What happens if the officer refuse to resign when called upon?

Mr. CHURCHILL: He can be removed from the list, His Majesty having no further need of his services, at any time on the responsibility of the Secretary of State.

Sir F. LOWE: Suppose he refuse to resign and demand to be tried by court-martial, is not that course open to him?

Mr. CHURCHILL: No; no officer can demand a court-martial as a right.

Sir F. LOWE: If he is asked to resign. I presume he has to resign?

Mr. CHURCHILL: Certainly.

Oral Answers to Questions — MESOPOTAMIA (NATIVE LEVIES).

Lieut.-Commander KENWORTHY: 21.
asked the Secretary of State for War whether native levies are being raised and trained in Mesopotamia; when it is expected that native levies will be able to relieve the greater part of our troops in Mesopotamia; and what is our future policy as regards the Army of Occupation in Mesopotamia?

Mr. CHURCHILL: The answer to the first part of the question is in the negative. Future policy with regard to the policing of Mesopotamia cannot be definitely laid down until we receive a mandate to administer the country. The possibility of using native levies to some extent is, however, under consideration.
As regards the Army of Occupation, our future policy is to cut it down as much as possible, and to employ as large a proportion of Indian and other native troops as possible. The extent, however, to which local native troops could be employed, depends on their efficiency, which is at present an unknown quantity. It is hoped to make considerable use of the Air Service with a view to economising troops and their maintenance in the outlying unsettled districts.

Mr. MacVEAGH: Can the right hon. Gentleman give any information with regard to the future policy of the Government concerning the Army of Occupation in other countries not so far away as Mesopotamia?

Mr. CHURCHILL: No, nor as to the extent to which it is possible to rely on native levies.

Mr. DEVLIN: When will the Army of Occupation in Dublin be transferred to Belfast?

Oral Answers to Questions — SOLDIERS' GRAVES.

.Lieut.-Col. WALTER GUINNESS: 22
asked the Secretary of State for War whether, in view of the number of relatives of those who fell in the War who can-
not afford the expense of the extra inscription of sixty-five letters which is allowed on headstones, provision may be made for defraying the cost of such inscriptions out of public funds?

Mr. CHURCHILL: I will ask the Imperial War Graves Commission to consider whether, in cases where the next-of-kin cannot afford to pay for the additional personal inscription on headstones, the expense should not be met out of the Commission funds.

Lieut.-Colonel GUINNESS: Will the right hon. Gentleman also ask them to consider whether this privilege might not be extended to units, to select a uniform inscription where the relatives do not wish to avail themselves of this opportunity?

Mr. CHURCHILL: I will see that that suggestion comes to the notice of the Imperial War Graves Commission.

Oral Answers to Questions — DEMOBILISATION.

2/10TH BATTALION ROYAL SCOTS.

Mr. WATERSON: 24.
asked the Secretary of State for War if at present about 700 men of the 2/10th Royal Scots are on twenty-eight days' leave, with no guarantee as to demobilisation; and, having regard to the fact that these men suffered hardship under extraordinary circumstances and climatic conditions, if he will take some steps to prevent them from going again overseas?

Mr. CHURCHILL: The 2/10th Battalion Royal Scots was sent home for disbandment, and all men who are eligible for demobilisation are being demobilised with all possible speed.

DESERTION AND RE-ENLISTMENT.

Lieut.-Colonel ARCHER-SHEE: 35.
asked whether a soldier who deserted from the Territorials in 1915 and immediately re-enlisted in a Service battalion under the impression that he would be sent to France earlier, and who was brought before his commanding officer on the charge of desertion, the case being dismissed, is entitled to receive a full gratuity for his service when he is demobilised?

Mr. FORSTER: If the hon. and gallant Member will kindly furnish me with particulars of the soldier in question, I will have his case investigated.

Oral Answers to Questions — GENERAL SERVICE MEDAL RIBBON.

Colonel BURN: 25.
asked the Secretary of State for War if permission will be given to wear the general service medal ribbon on 19th July to those of both sexes who are entitled to it?

Mr. CHURCHILL: The conditions under which the medal is to be awarded have not yet been published, and until this is done and the medal authorised I regret that permission to wear the riband cannot be given.

Colonel BURN: Could not matters be expedited, as it would give such satisfaction to a large number of men?

Mr. CHURCHILL: We will do our best to expedite it, but they are much more complicated questions than appeared at first.

Lieut.-Colonel MURRAY: Is it not permissible to wear the 1915 Star, for instance?

Mr. CHURCHILL: Oh, yes! There is no need to wait for the issue of the medal itself or the star. So long as the Order has been issued entitling the men to mount the riband, they can do so. But the Order has not yet been issued.

Oral Answers to Questions — MOTOR REPAIR DEPOT, SLOUGH.

Mr. BRIANT: 27.
asked the Secretary for War, in view of the statement made by the Cippenham Select Committee that the War Office files carrying the history beyond the summer of 1917 are missing, whether an investigation has been held into the loss of these official documents and those responsible for the loss; and, if so, what was the result of such investigation?

Mr. CHURCHILL: I am having this matter investigated, and perhaps the hon. Member will repeat his question next week, when I hope to be in a position to answer fully.

Mr. HOUSTON: Is it the case that this correspondence was thrown out of the windows of the War Office by a young lady clerk in the exuberance of her feelings on Armistice day?

Oral Answers to Questions — ROYAL AIR FORCE.

UPAVON CAMP, WILTS.

Colonel BURN: 28.
asked if the young men who enlisted in the Royal Air Force and are now stationed at Upavon Camp, Wilts, are being put through a thorough course of training to make them thoroughly efficient?

The UNDER-SECRETARY of STATE for AIR (Major-General Seely): I presume that my hon. and gallant Friend is referring to the officers now quartered at the Central Flying School, Upavon. They are there awaiting passages to the various Dominions.

Colonel BURN: Are the men who enlisted in the Royal Flying Corps or the Royal Air Force being usefully employed and instructed in their duties, or are they only doing fatigue duty in the camp?

Major-General SEELY: I was there the other day, and I think everything is being done that could be done in that regard. If the hon. and gallant Gentleman wishes to bring forward a particular point I shall be glad to deal with it.

TECHNICAL PAY.

Lieut.-Colonel Sir F. HALL: 81.
asked the Under-Secretary of State to the Air Ministry what amount of technical pay, if any, it has been decided to award to technical officers in Class A of the Royal Air Force; whether the same is to be retrospective from the 1st September, 1918, and will include technical officers demobilised before the decision has been arrived at; and, if so, whether an officer who would thus be entitled to additional pay can claim the same together with gratuity based on the larger amount of pay?

Major-General SEELY: I am not yet able to announce the general scheme of pay for the future, but hope to be able to do so shortly, and will my hon. and gallant Friend defer his question to a later date.

Oral Answers to Questions — LABOUR CORPS, SUTTON CAMP.

Mr. WATERSON: 29.
asked whether at Sutton Camp there are about 400 men belonging to the Labour Corps under armed guard; and, if so, will he appoint a Commission of Inquiry as to the treatment of soldiers in this camp, and give the soldiers an opportunity of stating their case without fear or favour of being penalised or otherwise?

Mr. CHURCHILL: Inquiries are being made, and I will write to the hon. Member as soon as possible.

Oral Answers to Questions — TRAMWAY DEPOT, HAMPSTEAD (MILITARY OCCUPATION).

Sir F. HALL: 30.
asked the Secretary for War if he is aware that the tramway depot at Cressy Road, Hampstead, was taken possession of by the military authorities during the War and, although repeated applications have been made, the property has not yet been returned to the London County Council; whether he is aware that the continued occupation of this depot by the military authorities is causing great inconvenience to the council with regard to the running of their tram-cars on the Hampstead route; and whether, considering the great shortage of tramway accommodation at the present time, he will give instructions for the depot to be returned immediately to the council?

Captain GUEST: Special attention is being given to this matter, and the Cressy Road tramway depot will be handed over as soon as alternative accommodation is obtained. Negotiations with this object in view are in progress.

Sir F. HALL: Have they not been in progress some time, and can the hon. Gentleman tell me when the War Office are going to find an alternative site?

Captain GUEST: Negotiations are at present in hand, and it would naturally be undesirable to give any information as to the actual date.

Oral Answers to Questions — GERMAN PRISONERS OF WAR.

Mr. A. SHORT: 31.
asked whether he is aware that 8,821 German prisoners are employed on military work by the War Office; and, if so, whether he will super sede such labour with British civilian labour?

Captain GUEST: The figures given arc approximately correct. Instructions have already been issued that German prisoners of war are not to be employed by the military authorities on work for which civilian labour is available and could be employed. It is anticipated that by the end of the present month the number of prisoner
employed will have been reduced to about 6,500, and this number will, of course, be still further reduced, from time to time, as the supply of civilian labour increases.

Captain W. BENN: Can the hon. Gentleman say when it is intended to restore these men to their own country?

Captain GUEST: I should be glad to have notice of that.

Mr. TYSON WILSON: Is the hon. Gentleman aware that a considerable number of British workmen who can do this work are receiving out-of-work donation?

Lieut.-Colonel THORNE: Is it not laid down in the Peace Treaty that the German prisoners are to be returned to their own homes?

Captain GUEST: I have asked for notice of the question. With regard to the question by my hon. Friend (Mr. Tyson Wilson) there is more in that than meets the eye. Every effort has been made to obtain civilian employment.

Oral Answers to Questions — ARMY PAY OFFICE (DISCHARGE OF EX-SOLDIERS AND SAILORS).

Mr. JOHN JONES: 32.
asked the Secretary for War if he is aware that great dissatisfaction has been created by the discharge of ex-soldiers and ex-sailors who have been employed at the Army Pay Office, Lower Thames Street, S.E.; and if ho will state why women and civilian clerks have been retained whilst these men, many of whom have been wounded in the War, have been dismissed?

Mr. FORSTER: The matter is already the subject of inquiry, and particulars are being obtained of any disabled soldiers who have been discharged, in order that their cases may be considered.

Oral Answers to Questions — NAVAL AND MILITARY PENSIONS AND GRANTS.

ROYAL AIR FORCE (SERGEANT-CADET W. CONNON).

Sir HENRY COWAN: 33.
asked the Secretary for War whether his attention has been called to the case of Sergeant-Cadet William Connon, No. 175504, Royal Air Force, who was demobilised on 28th February and informed that a gratuity
of £7 10s. was to be placed to his credit in the Post Office Savings Bank, but who has received only £7, and has been unable, notwithstanding repeated applications, to obtain either the balance of 10s. due to him or any satisfactory explanation of its being withheld; and whether, in view of numerous similar complaints from demobilised soldiers, he will cause inquiries to be made into the facts of this case?

Major-General SEELY: This non-commissioned officer has received the full war gratuity due for his ten months' service, namely, £8, less £l deducted for a greatcoat taken away, making £7 net. The Pay authorities cannot trace any notification being made that £7 10s. net would be paid, nor the receipt of any complaint as to the amount paid.

WOUND AND DISABILITY PENSIONS.

Lieut. - Colonel ARCHERSHEE: 36.
asked the Secretary for War why an officer who has been demobilised and who is drawing a wound pension from the Army funds, and is also drawing a disability pension from the Ministry of Pensions, is not allowed to have the whole of his pension consolidated and transferred to the Ministry of Pensions, more especially in view of the fact that the Pension Ministry pay the bonus?

Mr. FORSTER: The wound pension must be separately charged in the public accounts, but I will consider whether the officer cannot draw the two payments in one sum in future.

19th ROYAL HUSSARS (J. M. GUY).

Lieut. - Colonel ARCHER SHEE: 87.
asked the Secretary for War whether he is aware that Mr. J. M. Guy, late saddler quartermaster-sergeant, 19th Royal Hussars, recently retired after forty-five years and 170 days' service as being medically unfit for further war service, and that this warrant officer is now only drawing a pension of £l 2s. 9d. per week; and whether, in view of the fact that he has served in the following campaigns: Egypt. 1882–4, the Nile 1864–5,South African War throughout, defence of Ladysmith, and is also in possession of the Good Conduct and Meritorious Service Medals as well as the 1914 Star, that ho was wounded on the 29th June, 1900, and joined the British Expeditionary Force in France in August, 1914, and also of his age and long service,
this pension may be supplemented by the special pension laid down in Article 1,201 of the Royal Warrant?

Mr. FORSTER: This man was discharged in March, 1918. He is drawing the maximum pension of his rank. He has received £207 arrears of pension as from the beginning of the War under the Order which enables a soldier serving in the War to draw his pension from the completion of twenty-two years' service; and in addition, payments amounting to about £24 from the Ministry of Pensions. He had the Meritorious Service Medal in 1906, and may in due course be granted an annuity in consequence. As far as can be foreseen, any general revision of the scale of pensions will apply to him. Special pensions under Article 1,201 are given on the recommendation of the Commissioners of Chelsea Hospital, who have reviewed this case and do not make any such recommendation.

Lieut.-Colonel ARCHER-SHEE: Cannot further consideration be given to this particular case, in view of the extraordinary nature of the man's service— forty-five and a half years' service?

Mr. FORSTER: I will ask the Commissioners of Chelsea Hospital to consider that.

VICTORIA CROSS.

Colonel ASHLEY: 41.
asked the Financial Secretary to the War Office whether he is aware that, whereas the full Distinguished Conduct Medal gratuity of £ 20 is payable in respect of a bar earned to the Distinguished Conduct Medal, a bar earned to the Victoria Cross only brings the recipient one-half of the Victoria Cross annuity, or £5 a year, as an addition to the annuity originally gained by the cross; and whether he will issue a Regulation to remove this anomaly?

Mr. FORSTER: I will consider this point in connection with the general review spoken of in my reply to my hon. and gallant Friend on 13th May.

Colonel ASHLEY: When will the hon. Gentleman be able to announce a decision?

Mr. FORSTER: I am afraid that I cannot mention a day.

Sir M. BARLOW: Will the hon. Gentleman see that these do not in any way interfere with the old age pensions?

Mr. FORSTER: I will see that the point is borne in mind, but I am afraid that it would not rest with me to come to a decision.

MERITORIOUS SERVICE MEDAL ANNUITIES.

Colonel ASHLEY: 42.
asked the Financial Secretary to the War Office whether he can now state what increase is to be granted to the sum annually allotted for Meritorious Service Medal annuities?

Mr. FORSTER: I am afraid not yet.

Sir F. HALL: Will there be an increase in order that these men may be able to get the pension of 6d. a day?

Mr. FORSTER: I have said that the point was being considered.

MERCANTILE MARINE (PRISONERS OF WAR).

Lieut.-Colonel BURGOYNE: 66.
asked the Pensions Minister whether any provision has been made to meet the needs of repatriated prisoners of war of the Mercantile Marine?

The PARLIAMENTARY SECRETARY to the MINISTRY of PENSIONS (Colonel Sir James Craig): The Ministry of Pensions is concerned with only a small proportion of the Mercantile Marine, namely, those ratings who signed certain Admiralty agreements and were under naval discipline. Such men are pensionable on the same terms as men of the Royal Navy, and can apply to their local war pensions committee at any time after demobilisation if suffering from a disability due to or aggravated by service.

Lieut.-Colonel BURGOYNE: Are we to understand that a large proportion of these gallant men, who have been disabled and impoverished in the service of their country, are "to receive neither recognition nor recompense from the State?

Sir J. CRAIG: No: my hon. and gallant Friend must understand quite differently. If these ratings have signed on under the special circumstances mentioned in my answer, then they come under the pensions scheme in the same way as men of the Royal Navy, or the Air Force, or the Army.

Lieut.-Colonel BURGOYNE: Is it not a fact that a large number were interned before they had an opportunity of signing what is referred to, and are they to be cut out of the benefit?

Sir J. CRAIG: If the hon. and gallant Gentleman will send me names of any cases, I will inquire into them.

Lieut.-Colonel BURGOYNE: I will send a hundred.

ARTIFICIAL LIMBS (ALLOWANCES).

6Mr. WIGNALL: 7.
asked the Pensions Minister if he is aware that the artificial limbs supplied by the firm approved by the Ministry of Pensions are not giving satisfaction; that whereas in 1916 an allowance of, approximately, £28 10s. was made to officers who had lost a limb, the said allowance has now been reduced to £17 10s.; if he is aware that some officers, in order to procure a limb that gives comfort and satisfaction, are forced to pay the difference between the allowance made and the prices charged by certain firms; and will he have inquiries made into the matter?

Sir J. CRAIG: Approximately, twenty-five firms are employed as contractors for the supply of artificial limbs to disabled officers and men, and my right hon. Friend is advised that the limbs have reached a high degree of efficiency and comfort. An officer may elect either to enter a fitting hospital, where he may obtain, free of cost, the limb considered best for his case by the board of surgeons of the hospital, or to purchase a limb for himself, in which case he may be granted a sum varying in amount from £40 to £10 10s., according to the nature of the amputation. There has been no reduction since 1916 in the amounts so granted. It is the case that some officers purchase limbs that are more costly than those on the contract list, but I understand that the difference in cost is not justified by the difference in quality. The whole subject has recently been investigated by a Committee, and I am sending the hon. Member a copy of their Report.

LOSS OF LIMBS.

Sir H. COWAN: 69.
asked the Pensions Minister whether his attention has been called to the case of Mr. James Mair, of Longside, Aberdeenshire, who, having lost his left arm and leg as a result of wounds received in action, is incapacitated from following his former employment and has been obliged to accept work of a much less remunerative character, and whose application for an alternative pension at the same rate as that granted to men who have lost both legs or both arms has been re-
fused; and whether, in view of the fact that earning capacity is more seriously affected by the loss of an arm and a leg than by the loss of two legs, he will take steps to redress this inequality, in view of his recent statement that men who have lost one arm and one leg are regarded as having been disabled in the highest degree?

Sir J. CRAIG: According to the information supplied to the Department by Mr. Mair, his present earnings together with his disablement pension exceed the highest rate of alternative pension which can be granted under Article 3 of the Royal Warrant. Mr. Mair's disablement— the loss of an arm and a leg—is one of fourteen classes of disablement which are scheduled as total in the Royal Warrant, but it does not entitle him to the special advantage of having his actual earning capacity ignored for the purpose of alternative pension, which is reserved for those who have lost both arms or both legs or are blind. As the hon. Member will have gathered from my right hon. Friend's statement, it is not proposed to amend the Warrant in this respect.

Sir H. COWAN: Does the hon. Gentleman not agree that the loss of one leg and one arm is a more serious disablement from the point of view of earning capacity than the loss of two legs?

Sir J. CRAIG: My right hon. Friend has answered a question specifically on the case. I think it really passes the wit of any man to draw an arbitrary line that does not create an anomaly somewhere.

Oral Answers to Questions — PEACE CELEBRATIONS.

LEAVE TO SERVICE MEN.

Major MALONE: 38.
asked the Secretary for War whether he will issue instructions to commanding officers to grant special leave to as many soldiers and sailors as possible so as to enable them to attend Peace celebrations at their own homes on the 19th July?

Captain GUEST: Orders have been issued by the Field-Marshal Commanding-in-Chief the Forces in Great Britain that all ranks serving at home who are not taking part in Peace processions on Saturday next and who can be spared should be given a holiday on that day.

Oral Answers to Questions — BELMONT CAMP, SURREY (POSITION OF SMALLHOLDERS).

Mr. ROYCE: 40.
asked the Secretary for War whether a large number of men recently called up from the land to rejoin the Army are smallholders and consequently had no employer to appeal for their retention nor opportunity to be included among the 20 per cent. left upon the land; whether a large number of this class at Belmont camp, Sutton, Surrey, have been practically doing nothing for the past month; and whether he will make inquiries with a view of allowing these men to return to their holdings where they are so urgently needed?

Captain GUEST: I am making inquiries, and will acquaint the hon. Member of the result in due course.

Colonel ASHLEY: Can the right hon. Gentleman say what these men are doing in a camp in England? Were they not called up on the plea that they were urgently needed for service overseas?

Captain GUEST: Notice was only given yesterday, and, as I have stated, we are making inquiries.

Mr. ROYCE: Will the hon. Gentleman expedite the inquiries as much as possible?

Captain GUEST: Yes. Inquiries have already been set on foot this morning.

Lieut.-Colonel MURRAY: Is it in order for a question to appear on the Paper as a starred question after only one day's notice?

Captain GUEST: I meant I only saw it yesterday.

Oral Answers to Questions — OIL ROYALTIES (DERBYSHIRE).

Mr. HOLMES: 46.
asked the Prime Minister whether the Government have come to a decision concerning the payment of royalties on the oil discovered in Derbyshire?

The DEPUTY-MINISTER of MUNITIONS (Mr. Kellaway): I can add nothing to the answer which I gave on the 8th instant, when I said:
The Government have this matter under consideration, and an announcement of their decision will be made as soon as possible.

Oral Answers to Questions — CANADIAN REPRESENTATIVE (WASHINGTON).

Lieut.-Colonel MURRAY: 49.
asked the Prime Minister whether he can state the present position with regard to the suggested appointment of a Canadian representative at Washington?

Mr. BONAR LAW (Leader of the House): I regret that I am not in a position to make any statement.

Lieut.-Colonel MURRAY: Is the right hon. Gentleman aware that if the appointment is made it will be the beginning of a far-reaching constitutional change and will he not therefore take the House of Commons into his confidence in regard to it?

Mr. BONAR LAW: I am quite aware of all the consequences, but this is not a new matter. There has been throughout the War a Canadian representative at Washington.

Lieut.-Colonel MURRAY: Is the right hon. Gentleman aware that the Canadian representative at Washington was not a representative in the sense proposed according to the announcement made in the Dominion House of Commons?

Mr. BONAR LAW: I have not seen the exact words, but the subject was discussed with the Canadian Prime Minister, and my hon. Friend may, I am sure, feel certain that it will not affect the relations of Canada and the United Kingdom.

Lieut.-Colonel MURRAY: Will the right hon. Gentleman take this House into his confidence before the- step is actually taken, so that this House may know what sort of a step is going to be taken?

Mr. BONAR LAW: I do not quite follow. One of two things must happen. Either we refuse to allow Canada to do what they want, or we do not. I do not see how submitting the matter to the House of Commons can alter that.

Oral Answers to Questions — BRITISH AMBASSADOR (WASHINGTON).

Lieut.-Colonel MURRAY: 50.
asked the Prime Minister whether he is now in a position to announce the appointment of a British Ambassador to the United States of America?

Mr. BONAR LAW: I regret that I am not yet in a position, to state the name of the new Ambassador.

Lieut.-Colonel MURRAY: If I put a question down for Thursday, will the right hon. Gentleman answer it then?

Mr. BONAR LAW: I would rather that my hon. Friend would leave it to next week, when I hope that it will be possible to give the name of the gentleman.

Commander BELLAIRS: What is the chief difficulty—finance or the man?

Mr. BONAR LAW: Neither; it is solely that the Government have felt that, in present circumstances, it is advisable to get the best man.

Mr. DEVLIN: Will the appointment be given to one of the Ulster Members who has not already got one?

Commander BELLAIRS: 60.
asked what is the actual net income from the State for a judge or Cabinet Minister whose salary is fixed at £5,000 per annum after Income Tax and Super-tax have been de- ducted; whether he will give the result also, in the case of the British Ambassador in Washington D.C.; assuming in both cases that there is no life insurance premium and that the gross private income is £1,000 per annum?

The CHANCELLOR of the E X-CHEQUER (Mr. Chamberlain): As regards the first part of the question, the taxpayer would, in the circumstances stated, be required to pay Income Tax and Super-tax amounting to £2,237 10s. for the present financial year. If the total tax were distributed pro rata between the salary and the private income, the proportion of tax applicable to the salary would be £1,864 11s. 8d., leaving £3,135 7s. 4d. out of £5,000.
Taking the taxable emoluments of the British Ambassador in Washington at the figure shown in the Estimates for the current year—namely, £2,500—the Ambassador would, on the assumptions indicated in the question, be required to pay Income Tax and Super-tax amounting to £l,162 10s. for the present financial year. If the total tax were distributed pro rata between the taxable emoluments and the private income, the proportion of tax applicable to the emoluments would be £830 7s. 1d., leaving £1,669 12s. 11d. out of the £2,500. In addition the Ambassador is paid a sum of £7,500 a year as "frais de representation, not taxable."

Oral Answers to Questions — BARRISTERS AND SOLICITORS (QUALIFICATION OF WOMEN) BILL.

Sir H. COWAN: 51.
asked the Prime Minister whether he is now in a position to state that the facilities tentatively promised for the Barristers and Solicitors (Qualification of Women) Bill will be granted during the present Session; and whether the Bill will be introduced as a Government measure?

Mr. BONAR LAW: I regret that I am not in a position to name a definite day.

Sir H. COWAN: Can the right hon. Gentleman say that facilities will be given during the Autumn Session?

Mr. BONAR LAW: I have already promised to do my best in the matter.

Oral Answers to Questions — LABOUR CONFERENCE (FRENCH SOCIALIST DELEGATES).

Mr. SPOOR: 52.
asked the Prime Minister whether he received a telegram which was dispatched to Paris and Downing Street from the British Labour Party Conference at Southport protesting against the action of the British authorities in preventing two fraternal delegates from the French Socialist Party travelling to South- port to attend the Conference, and asking for an explanation; and, if so, can he state the reason why no reply or acknowledgement of any kind has been made to this telegram?

Mr. BONAR LAW: Telegrams were sent to both the Prime Minister and myself, but were not received until after the gentlemen referred to had returned to Paris.

Mr. WIGNALL: Why, if the telegram was received late and so many people were waiting for a reply and are still waiting, was no reply sent?

Mr. BONAR LAW: The delay was one of those delays which occur frequently at present. I was going to Paris myself the morning after the telegram was sent. One of the gentlemen referred to spoke to me about it, and I told him I had not received the message, and he was already on his way back to Paris.

Oral Answers to Questions — OLD AGE PENSIONS.

Mr. BOWERMAN: 53.
asked the Prime Minister whether, in order to enable old
age pensioners to enjoy the Peace celebrations on 19th July, the Government will arrange for some additional sum to toe allowed to each pensioner in respect of the week beginning 18th July?

Mr. BONAR LAW: I would refer the right hon. Member to the reply which I gave on the 7th July to a similar question by my hon. and gallant Friend the Member for Bow and Bromley.

Oral Answers to Questions — ROAD BOARD GRANTS.

Major PRESCOTT: 54.
asked the Chancellor of the Exchequer whether he will give the total amount of State Grants already made to highway authorities in connection with the road and bridge programme, 1919–20; and whether he can give the total estimated cost of the road and bridge improvement scheme now awaiting the final decision of the Road Board?

Mr. BALDWIN (Joint Financial Secretary to the Treasury): The total Grants already made and promised to highway authorities in connection with the road and bridge programme 1919–20 now amount to £8,610,009. The total estimated cost of schemes for which applications have been received and on which no final decision has yet been communicated to the applicant authority amounts to £17,000.

Major PRESCOTT: 55.
asked the Chancellor of the Exchequer whether a provisional classification of the roads in England and Wales outside the administrative county of London and the county boroughs has been made by the Road Board; whether he is in a position to announce when the final classification will be proceeded with; and whether he will consider the desirability of extending the recommendations of the Departmental Committee on Local Taxation (1914) by classifying, in addition, the roads of Ireland and Scotland and the whole of the administrative counties and county boroughs?

Mr. BALDWIN: The Road Board were engaged on preparing a classification, but the work was suspended after the outbreak of war. I am not in a position to inform the hon. Member when the work will be resumed and completed. Consideration of the matter referred to in the latter part
of the question must be deferred until the Ministry of Ways and Communications Bill has become law.

Oral Answers to Questions — MUNICIPAL SAVINGS BANK.

Mr. S. SAMUEL: 56.
asked the Chancellor of the Exchequer, in connection with the Municipal Savings Bank Act, 1916, which municipalities have established savings banks under this Act; what are the amounts received by each on deposit; what interest they have paid; and what has been the cost of administration in each case?

Mr. CHAMBERLAIN: The Birmingham Corporation is the only municipality which has established a savings bank under the provisions of the Municipal Savings Banks Act, 1916. From the opening of the Savings Bank on the 29th September, 1916, up to the 31st March last, £520,815 had been received from depositors, of which £327,983 remained on deposit at the latter date. The total amount of interest allowed to depositors to that date was. £13,276, and the total cost of administration £8,545.

Oral Answers to Questions — CIVIL SERVICE PENSIONERS (WAR BONUS).

Sir F. LOWE: 58.
asked the Chancellor of the Exchequer whether he will consider the claims of Civil servants who retired be fore 1915 to a war bonus in addition to their pensions to meet the increased cost of living, especially having regard to the fact that those who retired since that year are now receiving these allowances?

Mr. BALDWIN: I would refer my hon. Friend to the reply which I gave yesterday to a question on this subject by the hon. Member for Plaistow.

Sir F. LOWE: Is there a very large number of these people, and will it involve a very considerable cost if their demands are complied with, because there is a very great amount of dissatisfaction?

Mr. CHAMBERLAIN: I shall be very pleased to get any information which my hon. Friend is able to supply.

Oral Answers to Questions — ACCOUNTANTS (INLAND REVENUE).

Mr. BOWERMAN: 59.
asked the Chancellor of the Exchequer whether his at-
tention has been called to an advertisement in which the Board of Inland Revenue invite applications for permanent appointments as accountants in the Inland Revenue Department, but limit the appointments to members of certain societies of accountants only; whether this limitation unfairly debars many equally efficient and experienced professional accountants throughout the country, who are not members of these societies, from applying for or obtaining any of these appointments; and whether he can see his way to adopt the definition of accountant as set forth in Section 137 (c) of the Income Tax Act, 1918, and allow an application to be made by a person who has been admitted a member of an incorporated society of accountants, such applications to be considered equally on their merits with applications from members of the societies mentioned in the advertisement?

Mr. CHAMBERLAIN: The answer to the first part of the question is in the affirmative. Having regard to the special nature of the work for which the accountants are required, I am unable to accept the suggestion made in the last part of the question.

Oral Answers to Questions — VICTORY LOAN.

Mr. HOLMES: 61.
asked the total amount of the subscriptions to the Victory Loan?

Mr. CHAMBERLAIN: Owing to the very large number of applications which have still to be dealt with by the banks, I cannot give the House any estimate of the result of the Loan at present. It may be possible to make a preliminary statement towards the end of the week. May I take this, the earliest possible opportunity, of expressing my most grateful thanks to all those who have assisted in the work on which I have been engaged, whether on the earth or in the air.

Oral Answers to Questions — POLICE OFFICERS' WIDOWS (PENSIONS).

.Sir F. HALL: 62
asked the Secretary of State for the Home Departnment whether he is aware that widows of police officers who died or resigned on or before the 31st August, 1918, are debarred from
receiving any pension; and whether, taking into consideration the excellent work that has always been rendered by the police force, he will reconsider this decision in order that all widows of police officers maybe placed in the same position as widows of officers who left the service on or after the 1st September last?

The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Shortt): Pensions are at present being paid to widows of constables who died from injuries received in the execution of duty before September, 1918. I do not see my way to propose legislation for extending the benefits conferred by the Act of 1918 beyond the limits laid down by Parliament so recently as last year.

Sir F. HALL: If the Home Office and the Government acknowledge that the widows of police officers who resigned from the service on or after 1st September, 1918, are entitled to consideration, is it contended that in the case of officers who resigned previous to that date widows are not entitled to the same assistance from the State?

Mr. SHORTT: That was the decision of Parliament only last year.

Sir F. HALL: Will the right hon. Gentleman look into the matter and see if some alteration cannot be made in order that these widows might be suitably looked after.

Oral Answers to Questions — GERMANS (REPATRIATION).

Sir J. BUTCHER: 63.
asked the Home Secretary how many interned and un-interned Germans, respectively, were deported against their will since 15th April, 1919, and how many interned and uninterned Germans, respectively, were granted exemption from repatriation since that date?

Mr. SHORTT: Since 15th April, 1919, about 1,400 Germans (including some British-born wives and children) have left this country. Of these, ninety men had been interned. It is difficult to give figures as to the state of mind in which these persons departed, but it may be taken, I think, that by far the greater part of them would have wished to remain in this country. Since the date named ninety-two exemptions from repatriation, have been granted to interned men on the advice of Mr. Justice Younger's Com-
mittee; and the exemptions already granted in 1915 and onwards to uninterned men and women have remained in force— save for a few cases of revocation—no fresh ones being required.

Oral Answers to Questions — CONSCIENTIOUS OBJECTORS (IMPRISONMENT).

Mr. A. DAVIES: 64.
asked the Secretary of State for the Home Department whether he is aware that M. Fishel, a conscientious objector who is serving his third sentence, one of twelve months, hard labour, in Walton Prison, Liverpool, is suffering from a severe nervous breakdown; and whether he will call for a medical report on this man's health with a view to his release from prison on health grounds?

Mr. SHORTT: This man was released by the authority of the Army Council on the 25th June. The medical officer reports that at that time he showed no signs of mental or physical ill-health.

Oral Answers to Questions — PENSIONS MINISTRY (STAFF).

Mr. W. NICHOLSON: 66.
asked the Pensions Minister what is the total number of the paid staff at the headquarters, and at the various local centres, in the county of Hampshire, employed by the war pensions committees; and whether he will state how many of this paid staff are men, women, and discharged Service men?

Sir J. CRAIG: The total number of the paid staff of the various war pensions committees in Hampshire is 127, of which 85 are women. Of the 42 men, 35 are ex-Service men.

Colonel ASHLEY: What steps do the Ministry propose to take to get rid of these women, and to substitute discharged men? Is the hon. and gallant Gentleman aware that the Secretary of the Chief Pensions Committee at Winchester is a woman?

Sir J. CRAIG: My hon. and gallant Friend is aware that my right hon. Friend is in all cases insisting that ex-Service men shall be employed when vacancies occur.

Oral Answers to Questions — DISABLED MEN (TRAINING).

Lieut.-Colonel GUINNESS: 68.
asked the Pensions Minister whether he can give an estimate of the number of disabled men in need of training; whether he will state how many county war pensions committees have now put forward schemes of training for approval; and for what number of men training will thus be provided during the next six months?

The MINISTER of LABOUR (Sir R. Home): I have been asked to reply to this question. It is not possible to supply a correct estimate of the number of disabled men who need training owing to the many incalculable factors involved in such a computation. Seventy-nine county war pensions committees have put forward schemes of training for approval. Under the Training Department of the Ministry of Labour there are at present places for about 15,000 men. This number is now being increased as rapidly as possible.

Lieut.-Colonel GUINNESS: Does that 15,000 include the places provided by the War Pensions Committee scheme?

Sir R. HORNE: It includes the whole of the places provided both by the War Pensions Committee and by the Ministry of Labour.

Oral Answers to Questions — SS. "AQUITANIA."

Sir F. HALL: 70.
asked the Parliamentary Secretary to the Shipping Controller whether, when the "Aquitania" was at Halifax on the 2nd June, she was lying alongside warehouses containing wood-pulp; whether application had been made that some of this pulp should be loaded in consequence of it being required urgently for paper-making in this country; whether he is aware that none of it was, however, loaded, and the steamer left with a considerable amount of space available; which Government Department was responsible for this great loss of tonnage; whether the official responsible has been suitably reprimanded; and whether he will give instructions that in future the loading of ships is to be left in the hands of the shipowners, in order that the best use may be made of all available tonnage?

The PARLIAMENTARY SECRETARY to the MINISTRY of SHIPPING (Colonel L. Wilson): This matter has been investigated, but neither the owners, the commander of the ship, nor the representatives of the Ministry of Shipping in
Canada have any knowledge of such cargo being tendered or declined. If my hon. and gallant Friend can inform me to whom the cargo was tendered and by whom it was refused I will have further investigation made

Sir F. HALL: Does my ion. Friend not remember that I have sent him a communication and letters from the Cunard Company, and from the importers of the wood pulp?

Colonel WILSON: Yes, my hon. Friend has sent me these communications, but I would remind him that the gentleman who communicated with him simply said he had been informed that some Government Department had been responsible for refusing to ship this pulp. I have no confirmation. I cabled to Canada, and I saw the commander of the ship, but confirmation was not forthcoming.

Oral Answers to Questions — RURAL TRANSPORT FACILITIES, SCOTLAND.

Lieut.-Colonel MURRAY: 72.
asked the Secretary for Scotland whether he is now in a position to publish the Report of the Special Committee appointed by him to consider the question of rural transport facilities in Scotland?

The SECRETARY for SCOTLAND (Mr. Munro): The Report of the Committee will be presented this week, and copies will be available to Members in the course of a few days. The completion of the Report for issue has been somewhat delayed by the preparation of the maps which are appended to the Report.

Lieut.-Colonel MURRAY: Does the right hon. Gentleman intend to take immediate action on this Report?

Mr. MUNRO: I shall, of course, consider that after the Report is received.

Oral Answers to Questions — FOOD SUPPLIES.

MEAT (PRICES).

Major HOWARD: 73.
asked the Food Controller whether, seeing that imported meat is 3d. per lb. cheaper than home killed, he will at once discontinue the control of home-produced meat and the head charges thereon; and, if not, will he explain why this course is not adopted?

THE MINISTER OF FOOD (MR. G. ROBERTS): As the difference between the price of imported and home-produced meat is not in itself a sufficient safeguard against an undue rise in the price of the latter, I am not prepared to adopt the suggestion put forward by the hon. and gallant Member.

Major HOWARD: Is it not a fact that the higher price of home-produced meat is the direct result of the head charges levied by the right hon. Gentleman's Department at all the markets, and that the money collected is being used to pay a horde of inefficient officials and for the carriage on imported meat?

Mr. ROBERTS: Certain expenses of officials have to be met, and I am also using the money for the benefit of the consumer.

Major WHELER: 76.
asked the Food Controller whether, in view of his decision to maintain control of the prices of beef and mutton throughout the winter and of the serious difficulty that farmers will be placed in in fattening stock owing to the light crops of hay, straw, and turnips, caused by the drought, he will undertake to state the winter control prices of beef and mutton before the end of July?

Mr. ROBERTS: I regret that owing to the difficulties involved in the fixing of the scale of prices I am not in a position to give the undertaking referred to. The question is under immediate consideration, and an announcement will be made at the earliest possible moment.

Major WHELER: Does the right hon. Gentleman not realise that if he wants home production in the winter he should at the earliest moment let the farmers know the prices he intends to fix?

Mr. ROBERTS: My reply states that it will be done as early as possible.

Major WHELER: I asked that we should have the prices before the end of July, and the time is getting on?

Mr. ROBERTS: I can only promise to give it at the earliest opportunity.

Major HOWARD: In order to prevent high prices, will the right hon. Gentleman withdraw the charges which press so heavily on traders?

An HON. MEMBER: May I ask if there is any intention of limiting the price of foodstuffs of various kinds, especially linseed and oil and cotton cakes, in order that farmers may be able to produce meat?

Mr. ROBERTS: Those matters do not come directly under my Department, but I have considered them and have made representations to the Government, and we are proposing to take steps in order to deal with the question.

Mr. FOREMAN: 79.
asked the Parliamentary Secretary to the Board of Agriculture if he is aware that the very short hay crop, combined with the poor root prospect and the scarcity and high prices of feeding stuffs, is exercising a prejudicial effect upon the supply of meat during the coming winter; and whether he is taking all necessary measures in advance to stimulate importation?

Mr. ROBERTS: The answer to the first part of the question is in the affirmative. With regard to the second part, steps are being taken to ensure that adequate supplies of imported meat are available during the winter.

Major HOWARD: What steps are being taken to increase home production?

Mr. ROBERTS: It is not possible for me to state in reply to a question across the floor, but there are many steps which are being taken. I am in constant co-operation with the Board of Agriculture with a view to stimulating home production.

Oral Answers to Questions — COST OF LIVING.

Mr. RAMSDEN: 74.
asked the Food Controller if he will state the cost of living now, taking the same articles as heretofore in previous estimates, as compared with the cost six months ago, a year ago, and five years ago?

Mr. ROBERTS: On the basis of a Budget representing, approximately, the average consumption of a working-class family before the War, the statistics published by the Ministry of Labour show an increase of 109 per cent. in the price of food between July, 1914, and 1st July, 1919. This percentage increase is slightly lower than the corresponding increase in July, 1918, and 9 per cent. less than the increase six months ago.

Oral Answers to Questions — COLD STORAGE PLANT.

Mr. FOREMAN: 75.
asked the Food Controller whether the Government can make any statement as to the present use of the cold storage plant erected for war purposes?

Mr. ROBERTS: The cold storage accommodation before the War was inadequate, and I understand that with the additions made during tine War the present accommodation is not in excess of the normal requirements of the country. The control of cold storage by my Department ceased on the 30th June.

Oral Answers to Questions — SPIRITS (STOCKS).

Lieut.-Colonel MEYSEY-THOMPSON: 77.
asked the Food Controller if he will furnish a Return of the whole of the stock of whisky, brandy, and other spirits now in bond in the United Kingdom?

Mr. ROBERTS: The Board of Customs, and Excise have prepared the desired Return, which will be printed in the OFFICIAL REPORT.

The following is the Return referred to:

The quantities of spirits remaining in the bonded warehouses of the United Kingdom, or entered to be warehoused therein, on 30th June last, were as follows:

Proof Gallons.


Home-made spirits
117,701,000


Brandy
3,435,000


Rum (including imitation rum)
10,718,000


Other sorts
723,000


Total spirits
132,577,000

These particulars are published in the Monthly Trade Accounts for June, 1919, page 276.

Separate figure for whisky cannot be given, as this article is not separately distinguished in the official records.

Oral Answers to Questions — TRANSPORT SERVICES (AGRICULTURE).

Mr. ROYCE: 78.
asked the Parliamentary Secretary to the Board of Agriculture what is the nature of the experimental transport services contemplated by the Board for application to agriculture in the
Holland-with-Boston Division; whether, in further considering this subject, the Board will consult representatives from the Holland County Council and the county agricultural executive committees; and whether, in view of the urgency for improved transportation, this consultation should take place at once?

Lieut.-Colonel GILMOUR: The nature of any experimental transport service which may be established in this district is still under consideration, and the final decision will be a matter for the Ministry of Ways and Communications when that body is constituted. The Board of Agriculture and Fisheries, in considering the agricultural interests involved, will not adopt or concur in any policy without first consulting the county council and other local bodies concerned.

Mr. ROYCE: Will they not enter into consultation with the county council and the other authorities interested in order to devise a scheme which will probably work better than by leaving the matter until the scheme is produced and then dissented from?

Lieut.-Colonel GILMOUR: I will represent what the hon. Member says to the Minister.

Oral Answers to Questions — RABIES ORDER, 1918.

Major COPE: 80.
asked the Parliamentary Secretary to the Board of Agriculture whether, in view of the losses sustained by farmers in cases where cattle are detained and isolated under the provisions of the Rabies Order, 1918, he will advise compensation being made in such cases; and, if the Board of Agriculture has no power to pay such compensation, will he say to which Department of State or otherwise application should be made for this purpose?

Lieut.-Colonel GILMOUR: Neither the Board nor any other Department nor local authority has power to pay compensation in the cases referred to. The necessary sanction can only be obtained by legislation.

Oral Answers to Questions — GOVERNMENT MOTOR CARS.

Lieut. Colonel W. GUINNESS: 82.
asked the "Under-Secretary of State to the Air Ministry whether steps have now born taken to prevent the use of Government motor cars for private convenience
such as the conveyance of officials of the Air Ministry to and from their residences and meals, and other unofficial business?

Major-General SEELY: The instructions prescribe that the use of cars is strictly limited to actual Service requirements, and I am advised that there is no ground for supposing that the facilities given are abused. It is held to be reasonable that high officials of the Air Ministry should be enabled, if necessary, to proceed by car to and from their residences when they have to work excessively long hours and require to economise time to the utmost.

Mr. TURTON: May I ask the right hon. Gentleman whether it was necessary for the lady who was driving an Air Ministry motor car to take officers to Ascot on official business?

Major-General SEELY: No, Sir, I was not aware that any lady driver drove an Air Ministry car to Ascot, and if that is the case, and if the hon. Member would let me know the occasion referred to, and the name of the car and of the lady, I will have the matter inquired into.

Mr. TURTON: If the right hon. Gentleman will read the "Times" newspaper this morning he will see a report of a police court, where the lady was fined £10 for excessive driving?

Major-General SEELY: I only had a glance at the newspaper this morning with reference to this matter, but I do not believe the car had anything to do with the Air Ministry. If she was in any way connected with the Air Ministry that is another matter.

Mr. MacVEAGH: Is the right hon. Gentleman aware that two members of the Government motored down to Palace Yard to-day in Government cars, each of them sitting beside a charming chauffeuse?

Major-General SEELY: I was not aware, and I deeply regret I was not one of those Ministers.

Oral Answers to Questions — WAR DECORATIONS.

Sir F. HALL: (by Private Notice) asked the Under-Secretary of State for War whether he is aware that the American troops have already been supplied with the ribbon pertaining to the decoration that is to be given to them for war service; whether
he is also aware that there is a feeling of dissatisfaction in delaying any ribbon to be supplied to the British fighting forces; and whether, considering that the Peace celebrations arc to take place next Saturday, he will at once issue instructions that all procurable ribbon shall be issued immediataely, in order that it may be worn by men in khaki on the 19th instant?

An answer not being given,

Sir F. HALL: On a point of Order. Is it usual on questions of which private notice has been given, which have been sent to Ministers, and which you, Mr. Speaker, call out, to find no Minister on the Government Bench to reply, and is it courteous to the House?

Mr. SPEAKER: I think an answer was given at an earlier stage, before the hon. Member entered the House. The matter was raised in several supplementary questions.

Oral Answers to Questions — BILLS PRESENTED.

PATENTS AND DESIGNS BILL, — to amend the Patents and Designs Acts," presented by Sir AUCKLAND GEDDES; supported by Mr. Bridgeman, Sir E. Pollock, and Sir Robert Home; to be read a second time To-morrow, and to be printed. [Bill 131.]

TRADE MARKS BILL, —"to amend the Trade Marks Act, 1905," presented by Sir AUCKLAND GEDDES; supported by Mr. Bridgeman, Sir E. Pollock, and Sir Robert Horne; to be road a second time To-morrow, and to be printed. [Bill 132.]

Oral Answers to Questions — MESSAGE FROM THE LORDS.

That they have agreed to, —

Edinburgh and Leith Corporations Gas Order Confirmation Bill, without Amendment.

Amendments to—

Stourport Gas Bill [Lords], without Amendment.

That they have passed a Bill, intituled, "An Act to empower the Mayor, Aldermen, and Burgesses of the borough of West Hartlepool to construct a tramroad, a tramway, and a street work, and to provide and work omnibuses within and beyond the borough; and for other purposes." [West Hartlepool Corporation Bill [Lords.]

And also, a Bill, intituled, "An Act for confirming an Agreement between the Trustees of the Clowes Settled Estates and the Manchester Ship Canal Company for the conveyance to the company of lands forming part of the settled estates in the county of Lancaster in consideration of rent charges to be created by the company." [Clowes Settled Estates Bill [Lords.]

Oral Answers to Questions — PRIVATE BUSINESS.

West Hartlepool Corporation Bill [Lords],

Clowes Settled Estates Bill [Lords],

Read the first time; and referred to the Examiners of Petitions for Private Bills.

Oral Answers to Questions — SELECTION (STANDING COMMITTEES).

STANDING COMMITTEE B.

SIR SAMUEL ROBERTS reported from the Committee of Selection; That they had discharged the following Member from Standing Committee B: Major Cohen.

STANDING COMMITTEE E.

Sir Samuel Roberts further reported from the Committee; That they had discharged the following Member from Standing Committee E: Captain Rupert Guinness.

Reports to lie upon the Table.

Oral Answers to Questions — STANDING ORDERS.

Resolutions reported from the Select Committee;
 1. "That in the case of the London County Council (Tramways and Improvements) (Petition for Bill referred back), the Standing Orders ought to be dispensed with: —That the parties be permitted to proceed with their Bill, on condition that Parts II., III., and IV., and such Clauses of Part VI. as do not relate to Part V. be struck out of the Bill: —That the Committee on the Bill do report how far such Order has been complied with."
 2. "That, in the case of the Ammanford Gas Bill, the Standing Orders ought to be dispensed with:—That the parties be permitted to proceed with their Bill."
 3. "That, in the case of the Local Government Provisional Order (No. 4). Petition for dispensing with Standing Order 128 in the case of
221
the Petition of 'the Partington Steel and Iron Company, Limited,' the Standing Order ought to be dispensed with."

Resolutions agreed to.

Orders of the Day — FINANCE BILL

Considered in Committee. —[Progress, 9th July]

[MR. WHITLEY in the Chair.]

CLAUSE 13. — (Income Tax for 1919–20.)

(1) Income Tax for the year 1919–20 shall be charged at the rate of six shillings, and the rates of super-tax for the purposes of Section four of the Income Tax Act, 1918, and the rates of tax for the purposes of Sections four teen and fifteen of that Act (which relate respectively to relief in respect of earned income where the income does not exceed two thousand five hundred pounds, and relief in respect of unearned income where the income does not exceed two thousand pounds), shall be the same for that year as for the year 1918–19.

(2) The annual value of any property which has been adopted for the purpose either of Income Tax under Schedules A. and B., or of Inhabited House Duty, for the year 1918–19, shall be taken as the annual value of that property for the same purpose for the year 1919–20; provided that this Sub-section—

(a) so far as respects the duty on inhabited houses in Scotland, shall be construed by reference to a year of assessment ending on the twenty-fourth day of May instead of on the fifth day of April; and
(b) shall not apply to lands, tenements, and hereditaments in the administrative County of London with respect to which the valuation list under the Valuation (Metropolis) Act, 1868, is, by that Act, made conclusive for the purposes of Income Tax and Inhabited House Duty.

The CHAIRMAN: The Amendments to this Clause on the Notice Paper are all in the wrong place, and should be put in the form of new Clauses.

Motion made, and Question proposed,
That the Clause stand part of the Bill.

Mr. STEWART: Do I understand you to say that my Amendment, which is only in respect of one word, should be brought in as a new Clause?

The CHAIRMAN: The hon. Member will observe that another hon. Member has put down a Clause on the point. One word will not do what the hon. Member desires, and he will find amongst the new Clauses the proper way of bringing up his proposal.

Mr. STEWART: I am not particularly wedded to these words.

Question put, and agreed to.

Clauses 14 (Continuation of Belief), 15 (Total Exclusion of Certain Incomes from Tax), and 16 (War Gratuities) ordered to stand part of the Bill.

CLAUSE 17. —(Allowance in Respect of Mills, Factories, etc.)

(1) In estimating the amount of annual profits pr gains arising or accruing from any trade the profits of which are chargeable to tax under Case I. of Schedule D, there shall, notwithstanding anything in Rule 5 of the rules applicable to Cases I. and II. of Schedule D, be allowed to be deducted, as expenses incurred in any year, on account of any mil-s, factories, or similar premises owned by the person carrying on such trade and occupied by him for the purposes of the said trade, and situate outside the United Kingdom, a deduction equal to one-sixth of the annual value of those premises.

Mr. G. LOCKER-LAMPSON: I beg to move, in Sub-section (1), to leave out the word "similar."
This Clause gives an additional relief of one-sixth allowed in this country between the gross value and the annual net value to premises abroad as a deduction for Income Tax purposes, but hon. Members will notice that in the Bill as it stands it only gives this additional relief to mills, factories, or similar premises. The pith of this matter really lies in the words "similar premises," which, in the past, have always been held to mean premises containing machinery. These words do not include any premises that do not contain machinery, and up to now I may mention that this allowance has been supposed to be used for the purposes of re-pairs. The object of the Amendment is to bring within the scope of this relief buildings used for the purposes of trade, although they do not happen to contain machinery. For instance, one may take the rubber plantations abroad. On the plantations in the Federated Malay States you have a large number of buildings which are used for the conveniences of coolie labourers. In that case, although those buildings would be used for the purposes of a man's trade, without this Amendment they would be outside the scope of the relief. I will take another case, that of stores used for dry goods. Take Singapore, for instance, where you have very large stores used for storing cotton goods from Manchester, or cheap jewellery from Birmingham, and other such stores. Without this Amendment, I think I am right in saying that this relief could not be given to any of these buildings, although it would be given supposing these buildings held machinery. I do not see why these particular buildings should be left outside the scope of the relief, because they are jut as much utilised for the purposes of a man's business as any of the other buildings he may happen to use.
I imagine that this has really been an oversight, perhaps on the part of the gentleman who drafted this Clause. I hope the result of my right hon. Friend's conversation may be to produce some concession. It is rather a technical question, but I think the Chancellor of the Exchequer will agree that the interpretation I have put on these words is a correct one, and I very much hope he may be able to give some concession.

Mr. BALDWIN (Joint Financial Secretary to the Treasury): The point raised by my hon. Friend is an interesting one, as all his points are. What he wants to do is to get a very much wider extension of a concession that we have put into this Bill than we meant to give. He will remember the concession that we gave last year, and the point was raised, I think, by the hon. Member for Nottingham calling our attention to the fact that the Clause we put into last year's Bill only gave the relief to premises situated within the United Kingdom, and not to all of them. I remember the occasion, because I myself gave him the reply, that, in my opinion, this point was a valid one, but he had only raised it on the Report stage, when it was too late to give it the consideration that it merited, and I told him that I hoped to be in a position in the following year to give effect to his desires. That pledge the present Chancellor of the Exchequer has kept, and he gives in this Bill the corresponding privilege that was given to the trades at home to trades that are situated abroad, and he has extended it at the same time to certain businesses under the rules and regulations quoted in the Clause. There, I think, to-day we must take our stand. I do not pretend for a moment that it is all that traders would like to have. Traders are like every other section of the community. They like to get as much as ever they can, and I know as well as my hon. Friend the claim which is made that the excessive wear and tear that is due to the immediate presence of machinery should be extended to buildings that may be in proximity to machinery, but which have hitherto not been included in those buildings for which special depreciation is allowed. I know my hon. Friend will not like my quoting at him again the Income Tax Commission which is sitting at present, but this question of depreciation is a very wide one, which involves large questions of principle and very complicated questions of detail. The whole subject of wear and tear will come up before
them, and I submit that until they are in a position to make recommendations on this subject we shall only make confusion worse confounded by trying to amend a Clause of this nature to get the wider meaning that my hon. Friend wishes to give to it. I would remind him, in conclusion, that, after all, traders in computing their liability under Schedule D are allowed to deduct in full the amount of expenditure on repairs, maintenance, and insurance of trade premises. That covers to a considerable extent the point that he raises. If he were successful in carrying this point ho would have to make further emendations in the Bill to cover the point with regard to buildings at home, but I hope, in consideration of the explanation I have given, that he will not wish at this stage to press the point further.

Mr. LOCKER-LAMPSON: In view of what has been said by the Government, I feel it very difficult indeed to press what is rather a technical point, and I, therefore, beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause ordered to stand part of the Bill.

Clause 18 (Extension of Relief in Respect of Colonial Income Tax) ordered to stand part of the Bill.

CLAUSE 19.—(Relief in Respect of Houses Occupied by Ministers of Religion.)

Where a clergyman or minister of any religious denomination occupies a dwelling house rent free by virtue of his office in such circumstances that the annual value of the house does not fall to be regarded as part of his income, he shall be entitled, on giving notice to the surveyor of taxes not later than the thirtieth day of September in any year, to require that the annual value of the house, after deducting there from the amount of any annual sum payable in respect of such house, shall for all purposes of Income Tax for that year be treated as earned income of such clergyman or minister.

In this Section the expression "annual sum" has the same meaning as in Rule 4 (2) of No. VIII. of the rules applicable to Schedule A.

4.0 P.M.

Mr. LOCKER-LAMPSON: I beg to move, to leave out the words
on giving notice to the surveyor of taxes not later than the thirtieth day of September in any year.
I think there is really even a clearer case for this Amendment than for the previous one. This Clause deals with appeals by clergymen for repayment of Income Tax on the ground of their being entitled to the lower rate charged in respect of earned income. I do not at all understand the two lines in this Clause restricting the
notice to 30th September. It will be seen that notice has to be given to the surveyor of taxes not later than the 30th September in each year. The Chancellor of the Exchequer will remember that under the Finance Act of 1907 the taxpayer had to give notice of his claim to a lower rate of duty before the 30th September of the year of assessment.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): I think I shall be able to meet my (hon. Friend on the point of the date by an Amendment which I shall be putting down on the Report stage. I think it would suffice to allow the taxpayer to give the notice required by the Clause, say, within three months after the assessment. I think that would meet my hon. Friend's point.

Mr. LOCKER-LAMPSON: I am not sure that it does quite meet my point. The point really is that while, under the Act I have just mentioned, notice had to be given before the 30th of September of the year of assessment, in the Finance Act of 1915 this time limit was abolished, and since then a person has been able to claim for the unearned rate within three years of the end of the year of assessment. That is under the Finance Act (No. 2) of 1915. Therefore I do not understand why this particular time limit has been introduced into this Clause. I do not see any reason for it. This Clause is only a very slight extension of the section in the Act of last year dealing with the question of appeals against the unearned rate. I am referring to Section 14 of the Income Tax Act of 1918. Under that section there is no time limit at all—there is nothing about the 30th of September. Therefore I do not see why this time limit should be imposed in this particular Clause.

Mr. CHAMBERLAIN: I think my hon. Friend is under some misapprehension as to the effect of the Clause. If he will place himself in communication with me, or with the Inland Revenue Authorities, I think he will be satisfied that there is a time which he will accept as fair. A clergyman or minister under this Clause is given the option of treating the annual value of the dwelling house which he occupies as earned income. He must exercise that option somehow. He will exercise it whenever it is in his favour to do so, but unless he decides one way or the other his assessment cannot be made.
We must therefore have a date within which he is given the opportunity of exercising his option. It must be a reasonable date, but it must not be so long that, by merely neglecting to exercise his option, he avoids assessment. That is why we put in a date. I think there is a case for Amendment, and as I Have said, I shall be very glad if my hon. Friend will discuss the terms of that with the Inland Revenue Authorities. I think we shall be able to meet any possible case that he would consider it proper to provide for.

Mr. LOCKER-LAMPSON: On that understanding, I ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Motion made, find Question proposed,
That the Clause stand part of the Bill.

Mr. MARRIOTT: The concession which this Clause contains is one which I have frequently pressed both upon the right hon. Gentleman the Chancellor of the Exchequer and on one or two of his predecessors. I, therefore, desire to take this opportunity of tendering my thanks to him for what he has done in the matter.

Question put, and agreed to.

CLAUSE 20. —(Interpretation.)

In this Part of this Act, and in any subsequent enactment relating to Income Tax, except where otherwise expressly provided—

References to Schedule A, B, C, D, or E (respectively) shall be construed as references to those Schedules in the Income Tax Act, 1918, as amended by any subsequent enactment;

The expression "the general rules" means the general rules applicable to Schedules A, B, C, D, and E, set out in the First Schedule to the Income Tax Act, 1918, as amended by any subsequent enactment;

The expression "the year 1919–20" means the year of assessment beginning on the sixth day of April, nineteen hundred and nineteen, and any corresponding expression in which two years are similarly mentioned means the year of assessment beginning on the sixth day of April in the first mentioned of those years;

The expression "earned income" has the meaning assigned to it in Section fourteen of the Income Tax Act, 1918;

The expression "The Income Tax Acts" means the Income Tax Act, 1918, and any other enactments relating to Income Tax.

Mr. LOCKER-LAMPSON: I have on the Paper an Amendment, at the end of the third paragraph, to insert the words
The expression 'similar premises' used in the Income Tax Act, 1918, Schedule D, cases 1 and 2, Rule 5 (2), means any premises built or constructed for the purposes of trade.
This is merely consequential on the first Amendment, and I therefore do not move it

Clause ordered to stand part of the Bill.

Clause 21 (Amended Hates of Estate Duty), Clause 22 (Interest on Death Duties), and Clause 23 (Extension of Relief from Death Duties in Case of Persons Killed in the War) ordered to stand part of the Bill.

CLAUSE 24.—(Continuance of Excess Profits Duty at Decreased Rate.)

(1)The Finance (No. 2) Act, 1915 (in this Part of this Act referred to as "the principal Act"), shall, so far as it relates to Excess Profits Duty, apply, unless Parliament otherwise determines, to any accounting period ending on or after the first day of August, nineteen hundred and nineteen, and before the fifth day of August, nineteen hundred and twenty, as it applies to accounting periods ended after the fourth day of August, nineteen hundred and fourteen, and before the first day of August, nineteen hundred and nineteen.

(2)Section thirty-eight of the principal Act shall as respects Excess Profits arising in any accounting period commencing on or alter the first day of January, nineteen hundred and nineteen, have effect as if forty per cent. of the excess were substituted as the rate of duty for eighty per cent. of the excess, or, in the case of an accounting period which commenced before that date but ends after that date, as if forty per cent. were substituted for eighty per cent, as respects so much of the excess as may be apportioned under this Part of this Act to the part commencing on that date.

In calculating any repayment or set off under Sub-section (3)of Section thirty-eight of the principal Act any amount to be repaid or set off on account of a deficiency or loss arising in any accounting period commencing on or after the first day of January, nineteen hundred and nineteen, or, in the case of an accounting period which has commenced before that date but sends after that date, on account of so much of the deficiency or loss as may be apportioned under this Part of this Act to the part commencing on that date, shall be calculated by reference to duty at the rate of forty per cent.

The CHAIRMAN: There are on the Paper a number of Amendments to this Clause proposing to increase the amount of the duty. They cannot be proposed in the absence of a Ways and Means Resolution, as they would impose a charge beyond that authorised by the Committee of Ways and Means. That disposes of the first five Amendments.

Mr. LOCKER-LAMPSON: I beg to move, at the end, to insert the words
Provided that if it is proved that during the period from the fourth day of August, nineteen hundred and fourteen, to the end of the last accounting period no excess profits as defined by the principal Act, and as amended, have been made the whole of the duty paid in respect of past accounting periods shall be repaid.
This Amendment is a very much more important one than the last two which I have moved. I may say that I have absolutely no interest in the Excess Profits question. I do not happen to be in business myself, and am unfortunately in possession only of a fixed income, which does not vary at all, so far as I know, in connection with any business. I am merely moving this Amendment because I believe that there does exist a considerable injustice in the machinery of raising the Excess Profits Duty at the present time. I have nothing to say against the principle of the Excess Profits Duty, but there is no doubt that sometimes it works most unfairly. One of the injustices is that cases may arise in which, although no excess profits have been made over a series of years, the taxpayer is legally liable to pay a considerable amount in Excess Profits Duty. I should like to give the House an illustration of what I mean. They will remember that the Excess Profits Duty is founded on the best two-years out of three—what is called the "pre-war standard"—and to that the taxpayer is allowed to add £200. Take the-case of a business where the pre-war standard, with the £200 added, comes to £2,000. The taxpayer is in that case allowed to treat the £2,000 as non-dutiable. Over and above that £2,000 he has to calculate his profits on which duty is payable. Suppose the first accounting period to be up to the 31st of October, 1914—that is to say, the year in which the War began — and suppose that his profits then were £2,000. In that case he would pay no duty at all. The second accounting period would be up to the 31st of October, 1915. If during that period his profits were £3,000, he would pay duty on £1,000, and the amount would be £600. If for the next accounting period, up to the 31st of October, 1916, his profits were only £1,000, he would be able-to recover the tax to the amount of £600. If during the next period, up to the 31st of October, 1917, his profits were £2,500, he would pay duty on £500, amounting to £383; and if in 1918 his profits were £3,500, he would pay duty on £1,500, amounting to £l,200. Then let us suppose that to the end of last year his profits were nothing at all; that would mean that he would show a deficiency of £2,000, and recover £933 in duty. The result of all that, over these six years, is that he has paid a duty of £2,183 and he has only recovered £l,533; that is to say, he has paid £650
net in duty. But this particular gentleman in this particular business has made no excess profits at all over the six years. During those six accounting periods his profits altogether have been £12,000, which, divided by six, is £2,000, or the exact pre-war standard upon which he is not liable to pay any duty at all. Yet, although he has made no excess profits during those six years, he has to pay a tax of £650. Surely that is very unfair. As I have said, I have personally no interest in these matters, but I put down this Amendment because my attention was drawn to the fact that such cases did occur continually, and I am sure the Chancellor of the Exchequer will agree that the taxpayer, if he has made no excess profits, ought not to be liable to pay any Excess Profits Tax. In a case of that sort—and I could give various other instances—it is quite clear that, although no excess profits are made, yet a heavy tax is demanded by the State. I very much hope that my right hon. Friend will meet me in some respect in this matter.
I may mention that there are on the Paper two other Amendments in the name of my hon. Friend the Member for Chippenham (Mr. G. Terrell). He is not here, and he has asked me to move them in his name. I do not want to weary the House by moving both my hon. Friend's Amendments, but will content myself with moving my own Amendment. I think I have made out a case in favour of it, and I hope the Chancellor of the Exchequer will meet me in some sort of way.

Mr. CHAMBERLAIN: The hon. Member has put very clearly a certain case in which it might be found, where the Excess Profits Duty comes to an end, that duty has been paid although in fact, over the whole period of the duration of the tax no excess profits have been made. That arises from the varying rates at which the Excess Profits Duty has been charged at different times for the different years during which it has been in force. When we wind it up, that point must be attended to by the Chancellor of the Exchequer of the day. It is, of course, not a point which has been discovered by my hon. Friend for the first time. I hope my hon. Friend is not unreasonable. It is certainly not the proper time. The only time when this point can be satisfactorily settled is when the tax is finally wound up. The Amendment of my hon. Friend will really not
fully meet the case. As far as I am concerned I recognise it is a question which must engage the attention of the Government and the Committee when the tax is brought to an end—not, I hope, at a very distant time—and I hope under the circumstances my hon. Friend will not press the Amendment now. I do not think it would be settled satisfactorily just now.

Mr. LOCKER-LAMPSON: Do I understand that the Chancellor of the Exchequer will do his best to make it retrospective so that if a taxpayer has paid a tax, although he has made no excess profits at all—do I understand that the Chancellor of the Exchequer will take the period as a whole and try to equalise matters?

Mr. CHAMBERLAIN: I cannot tell as to what will be done when the tax is wound up, but the Government will have discretion to deal with the matter. My view is that whatever we do we have to look at the tax period as a whole, and to consider the point equitably in regard to it.

Amendment, by leave, withdrawn.

Mr. LOCKER-LAMPSON: On behalf of my hon. Friend (Mr. G. Terrell) I beg formally to move, at the end, to add the words
Except that no apportionment shall be made where it is proved that at the end of the last accounting period stock was taken at cost or market price and consequent on the cessation of hostilities the market price fell prior to the first day of January, nineteen hundred and nineteen, when the repayment or set off arising there from shall be calculated at the rate of eighty per cent, even though the accounting period ends after the thirty-first day of December, nineteen hundred and eighteen.

Sir F. BANBURY: This is an Amendment to winch I had intended to speak. The position is that people who purchased the goods before the cessation of hostilities, and then, owing to the cessation, were met with a large loss on the goods, as a rule, paid. I think it is only fair, when a loss is made, that some consideration should be given for that loss.

Mr. CHAMBERLAIN: The question as to the valuation of stocks has been on many occasions before the House of Commons and has been brought prominently before my notice recently. In 1917 the Government gave an undertaking on the White Paper that
A period will be allowed after the termination of the War in which to ascertain by actual
realisation the value of the stock appearing in the account at the end of the last accounting period, and an allowance made from the profit of that period for any difference between the valuation and the sum realised. The period proposed is a fixed period of a year from the termination of the War, for all businesses.
Subsequently the Committee on Financial Risks made an alternative proposal. I expect my Friend is familiar with their Report. In substance they said that if a taxpayer shows that, owing to falling prices, his profits have during the period of five years after the War fallen below the level of his Excess Profits Duty percentage standard, he should be entitled, they suggested, to a special allowance. The maximum allowance which the Report proposes to admit was the sum equivalent to 20 per cent. of the taxpayer's average excess profit in the last two years of the duty. Subject to this maximum limit, the allowance was proposed to be taken in each case as 80 per cent. of the net deficiency of the profit below the percentage standard during the period of five years after the War. The Committee proposed that taxpayers should have the option of choosing, when making their return for the last Excess Profits Duty period, whether they will come under this concession or under the concession granted in the White Paper. Since this Committee reported, the position has changed to some extent, owing to the continuation of the Excess Profits Duty at 40 per cent., and some consequential modification of their recommendation would no doubt be necessary. Subject to this, however, I have always felt, so far as I am concerned, that it would be right to give effect to this recommendation when the time comes to make arrangements for the termination of the duty. There are two questions which in my opinion might profitably be explored in the immediate future. First of all, the general character of the practical arrangements which ought to be made in order to secure that taxpayers may be able as readily as possible to prove their titles, to this contemplated relief; and, secondly, the character of any consequential alterations in the recommendation of the Committee which would follow from the lowering of the rate to 40 per cent. I understand that representatives of industry would be ready to confer with the Board of Inland Revenue on this subject, and I have asked the Board to make arrangements for conferences of this kind. The matter is a difficult and technical one, and I hope the Committee will not press me.

Sir F. BANBURY: The object of the Amendment is the taking of steps to ascertain the best course, but we will have an opportunity later of consulting with the Treasury and the Inland Revenue and arranging the best way of meeting the-difficulty.

Amendment, by leave, withdrawn.

Motion made, and Question proposed,
That the Clause stand part of the Bill.

Sir DONALD MACLEAN: I stated my own position on a previous occasion. I thought then the Excess Profits Tax was a tax which should be strictly confined to the War period. I think it is a tax which is not conducive to the proper development of industry. It leads to great extravagance in expenditure. 1 myself know of several instances which have come to my personal knowledge where payment has been made by business firms which would be strongly objected to by them and has simply been allowed to go because it comes out of the Excess Profits Tax. I have knowledge of gratuities given to junior members of staffs of offices—large sums simply given away because it comes-out of the Excess Profits Tax. This is conducive therefore to extravagant expenditure in business. Regarding the question of the Excess Profits Tax I hope it is in order on the question, "That the Clause stand part," that whatever may be the merits or demerits of the Excess Profits Tax there is what I think I may call a unanimous feeling throughout the country that war profits should bear adequate war tax, and while the Excess Profits Tax is disappearing—the Chancellor of the Exchequer had already indicated that he hopes at no distant, date the tax will altogether disappear—I believe that there should be real economy and proper development in business. A tax of this kind undoubtedly hits initiative very hard. At the same time I must point out that the people of the country are looking to something being done towards getting a proper share of the gains of profiteers. During the War this has been a rough and ready method of getting something off. Is there any chance of our really getting off that? While this Excess Profits Tax is beginning its process of vanishing I hope that the Chancellor of the Exchequer will bear in mind for his next Budget the deep feelings of the country on the question of taxing the war profits and getting back into the national exchequer its adequate share
of what has been obtained by individuals in that way. It is a difficult thing, but of the feeling in the country on the point there can be no doubt at all.
With regard to the last Amendment moved, there again I wish to utter a word of warning to the Chancellor of the Exchequer. Such Amendments are full of pitfalls for the Exchequer. Over a long period of years there will undoubtedly be some of the very best brains of the country at the service of very powerful commercial undertakings, trying to get back, so to speak, on the Government in connection with the recoupment of what they may think to be an unfair share of what they have made in excess profits. I hope the Chancellor of the Exchequer will watch with a very jealous eye such proposals as receive the support of my right hon. Friend the Junior Member for the City of London (Sir F. Banbury). I know he is almost a purist in these matters of taxation, and I think the House has often been guided into better and more economic paths by some of his comments, but he will forgive me for pointing out that that kind of proposal wants very careful watching in the interests of the Exchequer, and I do hope that the Chancellor of the Exchequer, and the very able Department over which he presides, will bear in mind what I have said, and what I am sure everybody feels, that something ought to be done to get back from individuals who have grossly profiteered during the War a share, at any rate, for the national Exchequer.

Mr. J. DAVISON: I desire, on the part of the Labour party, to oppose the Clause as it stands. When the Chancellor of the Exchequer announced a reduction of 50 per cent. in the Excess Profits Duty it was received with acclamation by all those people engaged in commerce and industry in this country. One can imagine their pleasurable feelings when they knew the Excess Profits Duty was going to be reduced to that extent, although let me remind the Committee that not a single individual engaged in trade in this country anticipated for a moment that there was going to be that reduction. May I call attention to the course of events during the first two years of the War? In the first two years of the War little or no control was exercised by the Government with regard to payment of what was then in own as the War Munitions Levy. Little
or no control was exercised by the Government with regard to food prices. The total amount paid by the controlled firms in this country during those two years amounted to nil. The total amount paid by the uncontrolled firms amounted to. £3,000,000. I want members to observe what was taking place so far as the workers of the country were concerned during the course of those two years. Food prices advanced by 65 per cent. and wages were advanced by the employers by the magnificent sum of 17½ per cent to meet that increase in household necessities I heard in the Debate yesterday appeals both from the Members of these benches and from Members opposite for co-operation between the forces of capital and labour. Let me say quite frankly that it is sheer, canting hypocrisy to talk about co-operation between capital and labour. Capital is making at the expense, and through the necessities, of the nation enormous profits. During those two years the Government were compelled to pay almost any price for the material which was required for the carrying on of the War. When I said a few weeks ago that the income of these people had risen by leaps and bounds, I think I made no exaggerated statement.
During the years 1916 and 1917, according to figures supplied by the Chancellor of the Exchequer, the non-controlled firms in the country paid £153,000,000; the controlled firms paid £3,000,000. During 1917 and 1918 the non-controlled firms paid £224,000,000, and the controlled firms paid £65,000,000. In the first half of 1918 the non-controlled firms paid £167,000,000, and the controlled establishments £67,000,000. It was estimated by the Financial Secretary to the Treasury that on the 1st January, 1919, £80,000,000 was then outstanding as part of the assessment to the Excess Profits Duty for the periods I have named. If you take the total amounts that have been paid, or that were assessed to Excess Profits Duty, during the whole period of the War, you will find that they amount to no less than £1,252,000,000. I ask hon. Members opposite if, as the men are getting to know, and as I consider it my duty to tell them in the country, that these profits have been made during the War, you can expect them to indulge in that cordial co-operation in rebuilding the shattered fabric of commerce and industry so far as this country is concerned, in response to the appeals that have been.
made to them. The Chancellor of the Exchequer this afternoon referred to the Financial Risks Committee, but he did not tell the House that the Financial Risks Committee made a further recommendation to the Government which was not accepted. The Financial Risks Committee advocated a reduction of the Excess Profits Duty from 80 per cent. to 65 per cent., but they also made it a qualification of the reduction that the 15 per cent. should be retained in the business, in order to rebuild the business under post-war conditions. The Chancellor of the Exchequer has made a very generous concession to those people who are engaged in commerce and industry, by presenting them with a 50 per cent. reduction, and placing upon it no qualification with regard to the retention of a percentage of that which remains to them, in order that they may rebuild their businesses, and I very respectfully submit that that is not the way to obtain the cordial co-operation in the near future for which you have appealed to the workmen
I want also to say that the arguments that were adduced by those people who went to the Chancellor of the Exchequer and persuaded him to reduce the Excess Profits Duty by 50 per cent. will not bear the slightest investigation, in view of the fact that they have repeatedly told the workers of this country that it was owing to a ca' canny policy that we were not able to produce to the full limits of our capacity and energy what we ought to produce in the interests of the nation. Yet to-day you have employers going to the Chancellor of the Exchequer and using as one of their main arguments for a reduction of the Excess Profits Duty that it creates a spirit of extravagance and wastefulness in their businesses. Was there ever a more damaging indictment against the patriotism of people engaged in business when they say that if you retain the Excess Profits Duty at 80 per cent. it will provide no incentive to their labours? That is exactly what you have been telling the workers of the country, that they have been adopting a ca' canny policy, and here you have employers of labour not only adopting it, but practising it to the fullest possible extent. I do not believe a single Member of the Government to-day knows exactly the tremendous amount of profit that has been made during the War, because many people have evaded by the most unscrupulous methods the payment of the Excess Profits Duty. If anyone
doubts that statement, let me draw his attention to the "Accountants' Journal," and he will find there that prosecutions have been taking place for the recovery of the Excess Profits Duty. May I also remind the Committee that President Wilson—and I am told that the United States is the country above all others we will have to fear in competition now the War is over —has already decided in favour of the Excess Profits Duty as a permanent system of taxation in that country. If it can be carried out in America, surely it can be carried out in this country.
May I respectfully suggest to the Chancellor of the Exchequer, at a time when he is needing all the financial assistance he can secure, that he should turn to the whole of the people—for I do not exempt the Labour party from the operation of the suggestion I am going to make, because I know that many have made very large wages during the War—that, instead of reducing taxation to that extent, although I know it is claimed that it would injure industry, he should take the banking account of all people in the United Kingdom prior to the War, and since the War, and tax them upon the difference existing in their banking account. If he would do that, I venture to suggest that he would secure the whole of the finances he requires with which to carry on the various schemes of social and industrial reform that are necessary in this country. I, therefore, oppose the Clause as it stands.

Mr. HOGGE: I hope the Committee will divide against this Clause, because, in my view, it is iniquitous that the Chancellor of the Exchequer should be asking us to reduce the Excess Profits Duty by 50 per cent., from 80 per cent. to 40 per cent., while at the same time a colleague of his in the same Government, and the Government as a whole, are continuing the conscription of life for a longer period than this conscription of money. This House has passed an Act of Parliament by which it demands the service of the men of this country until at least April, 1920. In that case the State takes everything that the man can give. In this proposal in the Budget, on the very first possible opportunity, capital is salved of a great many of its responsibilities. Personally—and here I differ from my right hon. Friend who leads us on this bench—I am radically opposed to this thing, and shall go into the Division Lobby against it, as, I hope, a great many others will do when
this Clause is challenged. I do not see any defence which my hon. Friend the Chancellor of the Exchequer can put up against continuing, at any rate for the same period as the State continues the conscription of life, the conscription of property. After all, during the War only 80 per cent. of the excess profits were taken. In my view, 100 per cent. ought to have been taken throughout the War. If as a State you, on the one hand, ask a man to give up his occupation, his ability to make more capital, to leave his wife and family, you have the right to demand from wealth or capital the same kind of contribution.
I regret to see, on the threshold of the Peace arrangements, that the very first thing that is relieved, even before the men are relieved from the Army of Occupation on the Rhine, or on any of the fronts in far distant parts of the world, to come back home to make a wage for the support for the wives and families, the first thing relieved is the Excess Profits Tax, which was levied upon capital. My right hon. Friend made one suggestion with which I am in cordial agreement. That is on the question of war profiteering in particular. My hon. Friend who has just sat down also made a suggestion which he offered to the Chancellor of the Exchequer. He will excuse me if I think that, however valuable his suggestion was, it was not nearly complete enough as a tax on war profiteering. He does not go far enough, because if he took the bank book of everyone, as he suggested, and noted the accounts prior to the War and after the War, and taxed all on the difference, a great many people would escape taxation on the profits they have made out of the War. But, if it were possible, there would be no tax levied with greater unanimity throughout the length and breadth of the Kingdom than a specific tax on what we understand are the profits made out of the War. There is no doubt about this—let us realise the facts ! —that any number of people during the War made money who could not have made it but for the fact of the War. Everybody, too, I think, will agree on this point, that a profit made specifically because men were fighting and serving, should not remain the personal private property of any one person; it should be obtained for the State.
On the question of the tax proper the right hon. Gentleman is reducing the tax by 50 per cent. I presume the House will
carry the Clause as it stands, and my right hon. Friend will therefore get his way. I should like, however, to suggest to him, if that is so, there is one thing he ought to take into consideration. It is this that the incidence of the Excess Profits Tax is one of its great defects, and that new businesses in particular have been very heavily handicapped by its operation. I am putting on one side for the moment all the arguments I have used in considering the question of new and old businesses. A new business started during the war was allowed to earn a certain percentage of profit before any Excess Profits Tax was levied, and after that the Excess Profits Tax was levied in the ordinary way. In comparison, as my right hon. Friend says, with old-established businesses in their ability to choose a very much better datum line, new businesses and new enterprises have been enormously handicapped. I think it is well worth the attention of the Chancellor, if he is going to adhere to the excision of this Excess Profits Tax to one-half, at any rate, to consider whether he might make some further concession to new businesses. The old-established business can very much better afford to carry the 40 per cent. Excess Profits Tax than can the new business. I do not know whether my right hon. Friend can even now, or at a later stage of the Bill, in view of the fact that he is going to adhere to the 50 per cent reduction, see whether he could not make some further concession in the case of businesses started after 4th August, 1914. If he will look into that question he will find, over and over again, men have risked very considerable capital and got very little return for their risk because of this enormous Excess Profits Tax. On the general question, I am quite clear in my own mind that this is not the Budget in which you ought to reduce the Excess Profits Tax, and that my right hon. Friend ought to have waited until the Budget of next year before he started to make any reduction. He would then have synchronised any reduction he was going to make with the policy of the Government in regard to the conscription of life, and it would then have been much more acceptable. I shall certainly vote against the Clause.

Mr. CHAMBERLAIN: First, as to the caution that my right hon. Friend opposite addressed to me, I quite agree that in considering the provision necessary to wind. up the tax great caution will be necessary.
It is my misfortune, or it will be if I continue to hold office, and have to discharge the task of winding-up the tax, to remember that on every earlier occasion when my predecessors imposed, altered, or modified the tax we were confronted with various of these difficult and delicate problems, explained so persuasively to the House, and accepted by it with the explanation that these were matters that could not be dealt with at that moment, but would all be made important points to consider whenever the tax was finally brought to a conclusion. That is rather a heavy load of obligation for the Chancellor of the Exchequer of the future to carry. I can only say that these points, such as we have been discussing, recognised by my predecessor as points requiring consideration, are so recognised by me. The last point, the question of stocks, I have been considering, and I think we may usefully consider between now and next year what should be the proper method of dealing with the question. I must reserve my own opinion, for I have no power to pledge future action or forestall future action by the House, if for one moment I were inclined to do so.
I come to the tax itself. The hon. and right hon. Gentlemen who so affectionately sit side by side (Sir D. Maclean and Mr. Hogge) hold diametrically opposite views. If I fail to carry with me the sympathy and support of the hon. Member for East Edinburgh, I am reinforced by his right hon. colleague the Member for Peebles. This is because the right hon. Gentleman the Member for Peebles and I approach this question from one point of view, and the hon. Member for East Edinburgh and the other hon. Member who spoke approached it from an entirely different point of view. What hon. Members have in their mind's eye, as it would appear exclusively, is what profits has anybody made during the War, how much of these profits were taken, and how much more can we take? That is not the point of view from which I approach the consideration of what to do with the tax. I do not think it is the point of view from which my right hon. Friend approaches it. He and I, if I rightly interpret his view, ask ourselves: What affect is this tax having upon industry under present conditions? Is the tax harmful—from the point of view of industrial revival? Is it one of those factors which in critical times, when it is all important to get industry to work under new postwar conditions, is it an
obstacle to that resumption of industry, and an impediment in the way of enterprise, causing people to hesitate and hold back from what, from the point of view of the State, and every individual in the State—to whatever class he belongs—is the most important thing, namely, to get industry and production into full blast, and so secure the greatest possible output? If hon. Members, putting to one side passion and prejudice, examine the matter from the right angle, having regard to all the circumstances of trade and commerce, and the change from war to peace conditions, I do not think there is any Member who could answer differently from what we do —that a tax at that rate is a serious obstacle to the revival of industry. That is why I propose to reduce it.

Mr. DAVISON: May I remind the right hon. Gentleman that the Expert Committee set up by the Minister of Reconstruction considered this for a matter of eight months? They heard witnesses from all the industries in the United Kingdom. Not a single witness came before the Committee and suggested that there should be a reduction of 50 per cent. on the Excess Profits Duty.

Mr. CHAMBERLAIN: I do not think they suggested that we should bring it to an end. They said it was very desirable to bring it down from 80 per cent., and they pointed out the special inconveniences— which remains for us to remedy—which come from a tax that has been raised to so high a point as 80 per cent., and which, deliberately in some cases, was crippling the power of industry to make provision during the War for that changed condition for which they ought to have been prepared. Let me say a word or two more about the tax as a whole. It is not a tax which the House of Commons would be prepared to adopt but for the duration of the War. The hon. Gentleman who is going to vote against this Clause himself admits that the tax is inherently unjust, and particularly so to all new industries.

Mr. HOGGE: dissented.

Mr. CHAMBERLAIN: I was not referring to the interjected approving cheer, but to the speech of the hon. Gentleman. He said, not very logically, that if he had his way he would keep the tax on everybody at 80 per cent., but as I propose to reduce it 40 per cent., why could I not reduce it further on all new businesses? He said the incidence of the tax
was inherently unfair, and that is so as between business and business. It does penalise the new business. Now I come to the particular businesses mentioned by my hon. Friend opposite, that is those started during the War. Is it quite consistent with his own view as to the sacrifices which capital should be asked to make that these businesses should have special relief?

5.0 P.M.

Mr. HOGGE: That is a clear debating point, but my original position was that I would take the lot—that is 100 per cent. If my right hon. Friend is going to get his Clause, as he no doubt will, I asked would he give relief to new businesses?

Mr. CHAMBERLAIN: I know my hon. Friend would tax everybody 100 per cent. of their excess profits during the War, and he would continue to do that as long as a single soldier was serving under Conscription, but because I am not willing to go further than any of my predecessors were prepared to go during the stress of the War, he says if you will not take 100 per cent. do not take 40 per cent. off the new businesses which started during the War. Personally, I think the new businesses were very lucky to be able to start at all during the War, but the real point is as to whether I shall keep the tax on or not. If you try to keep on this tax permanently, and if you regard it as a proper instrument of taxation for peace time, you perpetuate the distinction between the new business and the old-established business which had a high pre-war standard of profit, and you strengthen the position of superiority which the old-established business has naturally acquired without the aid of taxation by reason of its being old-established. I do not believe that that is a suitable way of taxing profits as a permanent part of our system.
For my part, I continue this tax reluctantly for another year even at the reduced rate. I should like to have made other proposals, but whatever share of these profits you are going to take, or whatever share of the income, I do not believe that this particular tax is fair as between citizen and citizen as a permanent part of our system, and I do not believe it is conducive to the prosperity and development of industry. I know my hon. Friend opposite (Mr. Hogge) is not above a debating point himself, and I think sometimes that he strays a little from the narrow path of accuracy in search of a
debating point, and we are all liable to that, some of us more than others. My hon. Friend the Member for East Edinburgh talked as if there had been no release of men from the fighting services. He spoke of a reduction of taxation on capital and conscription of wealth before any release has taken place of a single man in the field of Conscription for military purposes. He knows that is not so, and when he repeats his speech, as no doubt he will do on countless platforms, perhaps he will correct the inaccuracy into which he has fallen. Apart from this tax, and this very strong desire to get at war profiteers, when the Minister proposes to get at the war profiteer he will have to define or somebody else will, what is a war profiteer, and then it will not be found to be quite so easy. It will be found that we use this word rather loosely without a clear idea of what is meant or where it would be possible to draw a limit. The hon. Member (Mr. Davison) who spoke on behalf of the Labour party said he did not wish to exclude the working classes from any proposal for taxation of wealth due to the War to which the increased income of others might be subjected, and he said he would take the income of every man before the War and during the War and tax him on the difference.

Mr. DAVISON: I would take banking accounts prior to the War.

Mr. CHAMBERLAIN: What about those who had not a banking account?

Mr. DAVISON: They would be exempt from taxation, and I should be among that number.

Mr. CHAMBERLAIN: Is he aware that some of our greatest profiteers would escape for the same reason because they had no banking account before the War? I have seen cases of shocking profits in regard to those who started with nothing almost, and who had not got a banking account at the commencement of the War. What I take note of is that the hon. Member meant this to apply equally, but that was not his real meaning, which was to choose a test of equality which will excuse-everybody who had not a banking account. Let us consider this point. The object of the tax was to tax war profits as they were made, and the House of Commons decided from year to year to take such a proportion of those war profits as it thought right to take. This may have been too much from the point of view of the smooth
resumption of peace after the War closed, or it may have been too little from the point of view of justice. You may argue either one way or the other, but at any rate the House of Commons year by year fixed what the tax was to be. During the period of my re-election after the acceptance of my office, a small matter came before the House when I was not present to explain relating to an Order in regard to new issues. There was an outburst from every quarter against retrospective legislation, but retrospective taxation is surely more contrary to equality and justice than retrospective legislation, and it is incomparably more difficult. If you try to find out to-morrow what is the capital of every person in the country, you will not be able to do it with certainty or equity as between one individual and another. You could not carry out such a gigantic valuation as that. It is incomparably difficult to carry out two capital valuations, one of which is to date back five years. How impossible it is to ascertain what is in fact the income or profits of everybody in this country five years ago, and to ascertain what effect the War has produced upon it!

Sir D. MACLEAN: The Income Tax returns will show it.

Mr. CHAMBERLAIN: I beg my right hon. Friend's pardon, but they show nothing of the kind. I will give two instances. Suppose a man has an income to-day of £500 or £5,000 greater than he had in July, 1914. Are you going to tax him on that as war profit? Perhaps he has inherited it from a relative, and you have to go into the question of the source. The right hon. Gentleman says the returns will show it, but for war profits we have not gone into banking accounts, still less into investments producing income. They have gone into other things, and you cannot judge by the income, because if you do you tax a man who saves in that form; you will not tax the man who puts his money in such things as diamonds, pearls, old furniture, or other articles which realise such fantastic prices. As to the man who simply squandered his money recklessly, he goes scot-free. He has had the same income and has wasted it when it was his duty to guard it, and because he has wasted it he is to go scot-free of this taxation.
It is really an incomparably difficult problem when we are told to go back over
the past five years and ascertain what profits are due to the War which are left after the imposition of the Income Tax, the Super-tax, and the Excess Profits Tax, and then take the whole or part of what is left. None of us wish to defend war profiteers. Most people have made profits during the War, but by the profiteer we mean someone who has made excessive and greedy profits, and to put proposals against this into a Statute and frame machinery to carry it out is very difficult, and I think my right hon. Friend opposite, who is a responsible man, and who may be called upon to hold office and to carry out this scheme, ought to consider this question very carefully before he raises expectations that measures of this kind could be carried out with any real measure of fairness as between the taxpayer and the State or between one taxpayer and another, and he should be more cautious.
In any case, whatever you may say on that matter, I repeat that I do not propose a reduction of this tax out of any tenderness to profiteers or any tenderness to high, extravagant profits in business. I do it because I feel that the tax at the rate which was then in force was a direct preventive of the results of industry, that, as my right hon. Friend opposite said, it was leading to extravagance, and that it was almost inevitably itself one of the factors in the rise of prices of which we are complaining to-day. It works with cumulative effect. It is charged by the State on manufactures, first on this business and then on that, being levied three, four, five or six times between the arrival of the raw material and the final sale of the finished product to the consumer. It is, therefore, not in the interests of any class, or of capital, or of workmen, but in the interests of trade and industry, and of the nation, as well as of all classes and all individuals, that I think the Committee would be wise to sanction at least a reduction of the tax to the figure of 40 per cent. as proposed in this Bill.

Mr. GRIFFITHS: I want to oppose this Clause on behalf of the Labour party. The right hon. Gentleman the Member for Peebles (Sir D. Maclean) said he welcomed the reduction of the tax down to 40 per cent. But if the right hon. Gentleman had been a trade union leader, as I have been for the last twenty years, he would have held quite a different opinion. I assisted the country as much as I possibly could during the period of the War,
and when I attended trade union branch meetings two of the questions which caused more discontent among working men than anything else I know of were the increase in the cost of living and the Excess Profits Tax. Let us examine and see what has taken place during the War, and then it may be possible for hon. Members to realise the feeling of the working classes in the country in regard to the Excess Profits Duty. At the beginning of the War an appeal was made to the trade union leaders of the country at the meeting held in London, and they were asked to go back to their members and appeal to them not to apply to employers for an increase of wages, because, as the Prime Minister put it at that time, silver bullets were going to win the War. While this was going on, while trade union leaders were trying to keep their members quiet, the cost of living increased to a considerable extent, with the result that the compact we entered into with the Government, as far as increased wages were concerned, broke down and then we had unrest in practically every industry in the country.
I am talking more particularly about South Wales than of any other part of the country, and I want to speak as one who knows what is taking place in South Wales at the present time. The society which I represent claims that it has been able to maintain discipline over its members for the last twenty years, and especially during the War period. But at this very time in the tinplate trade in South Wales unofficial meetings are being held with regard to a settlement which I made in the Industrial Council about a fortnight ago, and I see by the South Wales Press yesterday that the men are going to take an unofficial ballot with regard to repudiating the settlement arrived at in the tinplate trade a fortnight ago. I have had to meet these men, and when I have had to put propositions before them I have tried to understand not only their point of view but also the employer's point of view as well, because it is useless paying wages to men unless you can get trade—you must have trade first of all before you can pay wages. I pointed out the serious position the tinplate trade was in, and I may add this, that so far as American competition is concerned the Americans have captured our markets during the War, and they are now producing tin plates far
cheaper than we can. I pointed out to the men this was not a time for them to go forward and ask for an increase in wages, and that what we wanted was more production at a reduced cost in order to try and recapture the trade.
But in face of all that, their argument was this. The employers had made fabulous profits during the War and yet the Government are coming forward with a proposal to reduce the Excess Profits Duty to 40 per cent. I was asked what I had to say to that? I had no reply. It was put to me in the branch meetings and it is up to Labour Leaders to give replies to the men on these questions. They say: "Here are employers who have been making enormous profits and have been protected during the War." I am sure the Chancellor of the Exchequer knows the arrangement that was made under which during the War the employers were paid profits on the basis of two or three years, and, for instance, in the steel trade, or in the tin-plate trade if a firm had been making anything from 10 to 30 per cent. profit the Ministry of Munitions agreed to pay it that profit during the time the industry was controlled, and on the top of that they were charged for the first twelve months only 60 per cent. Excess Profits Duty and, later on, 80 per cent. Thus firms, on the top of their 30 per cent. were still pocketing another 20 per cent. of excess profits. This is a very serious thing for labour leaders who have to lead the men.

Mr. CHAMBERLAIN: 1 hope the hon. Member understands—I must say his speech appears to be a little doubtful on the point—that I am not lowering the tax with retrospective effect.

Mr. GRIFFITHS: I understand that, and I am coming to that point presently. The men know the profits that have been made by their employers. They know what excess profits they have had to pay. These industries have now been decontrolled and employers are able to fix their own prices. I am not sure whether the right hon. Gentleman is aware of the fact, but the price of steel is still going up. The returns we have had for the sliding scale within the last week or two in Monmouthshire give the men another advance, and, therefore, the price of steel must be going up; the workmen have better wages to-day than during the Armistice or during the War. The men say that although they are getting high wages the employers are
bound to be making bigger profits than during the War. [HON. MBMBERS "No, no."] Yes, it is the fact. Tine chief point made by the Chancellor of the Exchequer was that what is required is that the trade of the country should revive. Does he think that reducing the Excess Profits Duty to 40 per cent. is going to help trade to revive? That is an economic fallacy. Take the position of the tin plate trade to-day. We have only about 300 mills working out of 526. Bring the boys back from the Rhine and start the remaining mills in the tin plate trade; give them a chance to earn money and to produce useful commodities; then they will come into the national pool and while they will be producing commodities they will be able to buy other commodities such as are produced in the coal mines which are idle, in the cotton mills which are standing still, and in the shoe factories which are also idle. There you have a sound economic basis to work upon. You start one industry, you give the men a chance to produce useful commodities, and they thereby get money wherewith to purchase commodities from other industries which can also be re-started. You do not want extra capital in the tin plate trade to-day. You have the mills, as you have the coalmines and machines standing idle. You do not want extra capital to assist employers to restart them. You only want to got the men back in order to restart them. I for one would tax employers 100 per cent. Hon. Members may laugh, but let them remember we have to deal with the men. I know the position in South Wales. There used to be an old saying that what Lancashire says to-day England will say to-morrow. I would read it in this way that what Wales says to-day England will say to-morrow. When you have serious trouble in South Wales you cannot draw a chalk line. You do not know where it is going to end, once you kindle the fire. I want to give a warning note in time in case something may happen, and it is for that reason that I oppose this particular Clause of the Bill.

Mr. BRIGGS: I hesitate rather to address the House for the first time on a matter which lends itself to so many different opinions, but as a business man I feel I must take this opportunity to show the fallacy of some of the reasoning we have heard from the other side. One hon. Member said that he would tax business men on their banking account. I can assure him that a very large proportion
of business men in this country would be glad to be taxed on their banking account. Another hon. Member said that he would tax employers to the extent of 100 per cent. I wonder if that hon. Gentleman appreciates what would be the result, not of taxing them to the extent of 100 per cent., but of continuing the imposition of 80 per cent. for another three years. I can speak on behalf of business men, warehousemen, manufacturers, and traders of all kinds who have been established for a very long period of years. I am not referring to the very big undertakings which have opportunities of securing new capital. I refer more particularly to businesses with a capital of from £10,000 to £150,000. That capital has only been arrived at from the savings of the man who started the business. He had no other source from which he could obtain it. How is he, under these schemes of reconstruction that we are now talking so much about, to extend his business when it will require as least twice the amount of capital it required before the War? He has only two sources of supply for it. One is his own supply, secured by economy and non-distribution of profits, and the other, on which he cannot rely to the same extent, is his banker. Business to-day is extremely difficult. Most businesses are heavily overdrawn at their bankers. An old business of which I have some knowledge before the War was making £15,000 a year gross profits. During the War it made excess profits, and was taxed. I am in full agreement with the taxation of every cent of excess profits made during the four years of the War. That is a just tax, and one which businesses could stand. But now businesses want their money and cannot afford to have this tax on their profits. These businesses are already in debt to their bankers right up to the neck, because they have more money employed in the business in the way of goods and credit to their customers, and they have in a few days' or weeks' time to meet the very heavy Excess Profits Tax. Where are they going to find the money? They have not got it. They cannot realise any assets. They have only one source of supply, their banker, and if he fails them they are in the soup. Bankers are certainly behaving very well towards business men, but if the tax was continued for two or three years more it is almost certain that it would ruin a large number of old-established businesses.

Mr. MACQUISTEN: I have listened with interest to what the Chancellor of the Exchequer has said in regard to the commercial incidence of this Excess Profits Tax. It may have been perfectly right during the War, but it should have stopped practically from the day of the Armistice, at least as applied to all new businesses. It was very unjust in its incidence, especially as applied to limited companies, because the shareholders might be persons who had lost a great deal in the War, and they suffered very heavily because many of them were just coming into fruition after years of capital expenditure. It was very much on the lines of the Psalmist, I think it was, who said, "To him that hath shall be given." [Laughter.] I forget who it was, but this is a very unjust tax. At the same time 1 cannot altogether agree with what the right hon. Gentleman said in regard to war profiteers. He suggested that it would be a very dangerous thing to go back four years. That is what is done in regard to Income Tax where there has been an understatement of income or anything of that kind. It is a great misfortune that nothing can be done in regard to the taxaton of the people who have made very large fortunes in war conditions. It may be true that the commercial and practical difficulties of valuation are too great, but it is a very great calamity, because it creates a great feeling of unrest. A single man in a district who has blossomed out from a man of no account to a man of immense means causes a feeling of indignation throughout the whole countryside. It is an immense evil, and it is a great hardship, that out of this War there should have emerged a new commercial aristocracy of war profiteers, who are buying the land of England, and are hoping in the course of one or two generations to become country gentlemen. I should have been glad to see the tax applied to capital appreciation, because there has been enormous capital appreciation, and a good number of people escaped the Excess Profits Tax by the simple practice of going out of business. It was attempted in the Budget of 1917 to stop that, but by that time the horse was stolen. I know men who had large stores of commodities who sold out at the top of the market in 1916, realised all their assets, and went out of business. Possibly some of them started again. There were a great many ways of escaping the tax by capital realisation, and it seems a pity that there should
not be some way of getting a declaration from them of what their total estate was at the beginning of the War. That should have been done at the beginning of the War, but it ought to be possible to get a declaration now and test it in some way. But who is it who has prevented anything of that kind being done? It is the hon. Members (Mr. Hogge and Mr. Arnold) who suggested a general levy on capital, which would be not only impracticable, but most unjust, because the majority of people who had money before the War have not profited during the War, but have lost very heavily. I cannot help being struck by the fact that a leading London Liberal daily, at the beginning of the War, advocated that Great Britain should stand aside and should trade with the combatants and make money, and a great many readers of that paper did the same thing, and have now come along, when they saw this suggestion of taxing war profiteers and making a levy upon them, and said: "This will never do. We must propose a general tax on all capital. That will make it wholly impracticable, and, even if it comes to pass, it will fall more lightly on our friends than it would have done if only they had been selected for taxation."
They were the Gentlemen who prevented this being seriously considered, because even the Chancellor of the Exchequer admits that, if this tremendous burden of taxation is falling on the shoulders of all of us, it would be more just and more equitable that those who had profited very largely during the War should be the first to feel it. I personally know several of them who have spent large sums of the money they have made in all sorts of schemes for the benefit of soldiers and for charitable purposes, and have dissipated their profits in the most liberal fashion. Of course, they would always get credit for anything of that sort, but my view is that the majority of these men did not make their war profits consciously. They could not help themselves. It was forced upon them. Before control was imposed on shipping, before it occurred to Mr. Runciman to establish shipping control and the regulation of freights after the ship-owners had made enormous profits, although it occurred to nearly everyone prior to that, I knew a considerable number of ship-owners, and in one or two cases they actually complained to me that they could not lower freights because they would only be making a present to someone else, but that they trusted they would
all be called to account for it at the end of the day. I am not blaming these war profiteers. They could not help it in the majority of cases. It was the course of the market that made their profits. One man had the generosity to pay a large subscription into the Treasury, and others may follow suit, but that is not a just and equitable way. I wish the Chancellor of the Exchequer would put out of his mind any support there may be in the country for a general levy. That is an unfair proposal, because it is the people who have the capital who are liable for the war debt. The people who have not capital cannot be liable, because they have nothing to pay. It is all very well for the right hon. Gentleman to say he will not tax a man who has saved and has been thrifty and he will tax the man who squanders his money. You never can tax a man who has squandered his money, because he has not got any. If you could get some means of making some sort of equitable levy on these gentlemen who, consciously or unconsciously, have made great increases, it would lighten the burden of the taxation on all the rest of us who have no capital, and that is what we want to do. But by this suggestion which has been made from the other side, of a general capital levy, you have driven the ordinary man, who is the opposite of a war profiteer—who has lost money—into the arms of the war profiteer, and the two will stand together because of the unfairness of the suggestion. Therefore I wish the Chancellor of the Exchequer would apply his mind between now and the next Budget, or even take consultation with the officials of the Inland Revenue, and see if there is some way by which we can abate this scandal and get at the increment of those who have had undue appreciation of their whole estate. The hon. Members opposite have done more harm to any suggestion of this kind by their proposal of a general capital levy than anyone else. If a scheme of that kind is adopted, we shall be able to get quit of this Excess Profits Tax, and the sooner it is out of the way the better. It is an enormous hindrance to the industry, a cause of great extravagance in conducting business, and it is a great disheartenment for men who are starting life again, and will do great injury to the business and prosperity of the country.

Mr. SEXTON: I am not a financier, and I do not think that I can be accused of
being a bloated capitalist, but I subscribe to the theory of the Chancellor of the Exchequer that anything that penalises industry ought not to be insisted upon. Unfortunately, the Chancellor of the Exchequer only dealt with one phase of the financial aspect of industry, and that was the man who makes excess profits. I am not going into the figures, because there very probably I should land into a bog, but I want to remind the right hon. Gentleman that there are other persons in industry besides those who make excess profits and upon whom the industry of, this country depends. As we are on the question of profit, and as the right hon. Gentleman is in a generous mood towards those who make excess profits, may 1 be allowed to direct his attention to the bottom dog who is supposed to have made profits and whom he is taxing more than 100 per cent.? My idea of profit is the margin over and above the cost of running an industry, capital charges, administration charges, etc. The surplus leftover for personal use is looked upon as profit. If that principle applies to the employer, it ought to apply equally to the workman, I want to call the attention of the Chancellor to the hardship he is applying to men who are the backbone of the industry of this country, who have made it possible for excess profits co exist, and without whose industry there would be no profit at all. I heard a statement that a levy on capital was a dangerous thing, and that 100 per cent. would be monstrous and would practically make industry impossible. The point I want to make is this, that I represent the bottom dog of industry, who to-day is being absolutely robbed of what ever advance in wages he gets by the system introduced by the right hon. Gentleman of endeavouring to collect tax from men who are only employed casually one or two days in the week.

The DEPUTY-CHAIRMAN (Sir E. Cornwall): We are dealing with excess profits. The question now raised by the hon. Member is not before the Committee at the present time.

Mr. CHAMBERLAIN: I think the hon. Member's point arises on the new Income Tax Clause in the name of the right hon. Member (Mr. Adamson) for raising the exemption from income tax up to £250.

Mr. SEXTON: Shall I have an opportunity of raising this question on that Clause?

The DEPUTY-CHAIRMAN: The hon. Gentleman will have an opportunity of speaking when that Clause is under consideration.

Mr. MACKINDER: I want to refer to an aspect of this question which has hardly been dealt with. I doubt whether those who have spoken on behalf of the Labour party have realised the effect of the fall in the value of money. Roughly speaking, money has now only half the purchasing power that it had before. For that reason wages have been advanced. Where they have been advanced to the extent that they are now double what they were before, the real wages, that is, the wages measured in purchasing power, are the equal of what they were before. There are some wages that have been advanced to a greater extent than that. Let us speak broadly, and let us assume that wages have been doubled, and that those wages, therefore, have now the same purchasing power that they had before. If you are to measure profits with any justice, with any sense of purchasing power, with any sense of reality and not merely on the figures in account books, then if you are to have profits on the same scale as wages, those profits would have to be doubled as measured in money in order that you may have the same proportion of profits to wages as you had before the War. That is not the case at the present moment. There are some firms which have paid increased dividends, but if you take the dividends paid in the country at large I doubt very much whether you will to any appreciable extent, taking one firm with another, get beyond the pre-war standard of dividends as measured in percentages. Therefore, as measured in purchasing power, if you look at the money as distributed to the shareholders in the case of a firm which only pays the same dividend that it did before the War, you have in fact halved the dividend. I am not going to quarrel very greatly even with that fact, but I do want to point out what is the result in the case of that portion of the profits which is not distributed in dividends. It is out of that portion that you get your working capital.
At the present time every firm, speaking on the average, requires twice the working capital that it required before the War. If it employs the same number of workpeople it has to pay twice the wages. Therefore, at the end of the week when it comes to pay time the firm must have twice the balance available in the bank
for the purpose of paying its wages. From what source can that additional working capital be obtained? As things stand, only out of undistributed profits. Therefore, if you are to obtain the working capital which is necessary not only to set the industry going, but even to maintain the industry in its war conditions, you require to take out of your profits an additional sum equal to your previous working capital. In other words, merely to keep things going as they were before the War you require a very much larger profit to be made by the business. [An hon. member: "You have to buy your raw material."] You have to buy your raw material and everything else, and it all comes to the same thing that you have wages rolling up once more. You have to pay for the transport of your goods, and the greater part of the cost of transporting your goods, of course, goes in wages. Again and again the whole question comes to this, that we have all along the line half values as measured in money to-day. You must not speak merely of wages in half values, but of everything else in half values. My quarrel with the Chancellor of the Exchequer is that he has not removed the whole of this tax instead of one-half of it. [AN HON. MEMBER: "He should have doubled it!"] Doubled 80 per cent.? I cannot follow the hon. Member's mathematics. I do not know how he is going to make that inroad on capital. An hon. Member who spoke from the Front Opposition Bench referred to the difficulty he had in dealing with his own followers in his own trade union. I put it to the Labour leaders that at this moment they have not simply to voice what I would call the current ignorance in regard to these matters. It is up to them to acquaint themselves with the real position and to put it to their people, and to have some regard for realities that are not obvious. It is for them to look into the things that are not obvious. A working man, busy in his daily work, has not time to look into those things, and it is for their leaders to look at them and study the finance of them. They may one day be responsible for the finances of this country. If that be so, let us feel that we are in safe hands, and that they are attempting to realise facts.
We want to get industry started again. We want to get all our men employed. How are they to get employment unless we allow the working capital to be accumulated which is to give them employ-
merit? Where are you to get that working capital from? I have just come back from speaking through the country on behalf of the Chancellor of the Exchequer with a view to getting subscriptions to the Victory Loan. I have bad an opportunity of meeting a large number of people who were doing their utmost to subscribe to that Loan, because they felt it was essential in order that we might place not only the finance but the currency of this nation on a safer footing. Again and again I have realised the fact that the huge sums of money which have been subscribed is really capital and not profit. Men have taken the title deeds of their property, they have taken their securities in stocks and shares and have borrowed at the bank, and on that borrowing they have been able to make these considerable subscriptions to the Loan. They were utilising the capital resources of the country. One hon. Member who spoke just now referred to what I know is the absolute truth in regard to large portions of this country, that industry has been set going again by utilising the whole wealth of the business and not merely out of profit, but by going to the bank and borrowing. What is the effect of that? You are at the present moment utilising your banking system up to the extreme limit of safety. You are locking up the resources of the banks at a time when we want to keep them as liquid as we possibly can. How are you to avoid that? You can avoid that by leaving to the businesses, as far as possible, the profits which they make, in order that they may utilise those profits for the purpose of the expansion of trade, which will give employment, instead of borrowing from the bank. There is possibly something to be said for limiting the amount of profits distributed in dividends, and if some scheme had been devised for that purpose in order that we might secure that the largest proportion possible of the profits made in business were retained as working capital and utilised for the expansion of the business, I think we should have been going on safe lines.
6.0 P.M.
The effect of this tax is to drive commercial and industrial institutions to the bank in order to borrow the money which has been taken from them by the Chancellor of the Exchequer. And in regard to the higher profits, may I point out that the greater part of the Excess Profits Tax has been due to the fall in the value of money. The profits may be larger, but in
purchasing power they are not larger. You have sold goods to the Govenment, perhaps, you have had to sell them, at higher prices. You made apparently larger profits, you required larger profits in order to have larger working capital for the purchase of raw material and to pay for wages; but that larger profit, though it is a real increase in profit, is not an increase in profit as measured in purchasing powers. It is only an increase as measured in counters, in coins, in figures in your bank books, and of that vast sum of £300,000,000 that has been gathered in by the Chancellor of the Exchequer, a very large portion—probably the whole, if we take the country as a whole and take one firm with another, has been due to a rise in profits inevitably due to a rise in wages, which rise in profits is really essential now that you have come to a Peace time settlement, for the purpose of increased working capital. You obtain that working capital by a roundabout system: The Chancellor of the Exchequer has taken the money from the profits, and you have, therefore, to finance your industries, to go to the banks and borrow on the capital. For that reason I feel very strongly, especially now that the War has lasted five years, now that we have got new industries started in all directions, that at least we ought to be sure that we are going to relieve this unfair tax, whatever, tax is substituted at the end of the year, and I appeal to Labour members to explain to their people the effect in the change of the value of money, and the need for working capital, in order to give employment to the millions of people who are coming back from the Army at the present time.

Mr. W. R. SMITH: I am bound to say, speaking as a member of the Labour party, that the statement of the Chancellor of the Exchequer in regard to this matter and all the speeches that have been made since, have in no way removed from our mind the necessity of pressing this point on the Committee. The Chancellor of the Exchequer emphasised the fact that there were great defects in the method of levying this taxation. No one would deny that it has some defects. Almost every one of our war-time proposals, naturally and necessarily perhaps conceived in a hurried manner, contained some defects which, if the matter had been subjected to-full consideration at the time, might have been avoided. But it is possible to remove
the defects of this war tax without dealing with it in the manner which the Chancellor himself has suggested. One of the principal defects that have been emphasised has been its effect on new businesses; but the new proposals do not give any special relief to new businesses. In so far as the relative position of the old standing concerns are concerned, they still have no pre-war basis. They still are taxed on the same point as they were when the 80 per cent. was in force. Therefore, apart from the fact that they do get a reduction from 80 to 40 per cent., they are not relieved. They are relieved to that extent, but so are the other businesses; but the relative positions of the two concerns are exactly on the same basis as they were when the full 80 per cent. was levied.
I suppose it is true to say that we have not the same experience in this quarter of the House so far as business is concerned as some of the hon. and right hon. Members who sit on other benches, but our work and our experience do bring us into touch with business people, and in reference to that phase of the situation we have yet to find any business in this country that has been seriously handicapped in its development in the imposition of this Excess Profits Duty. I know quite a number of concerns in the industry with which I am associated, that have paid very substantial profits after the Excess Profits Duty was paid, and are already in a position to meet new construction for the extension of works, notwithstanding the fact that they have been taxed in this direction. But it is said that this is a war measure, and that we have now passed away from war conditions, and that this necessitates the modification which is proposed, but I wish to suggest to the Committee that we have not yet passed away from that phase of war conditions which necessitated taxation of this character being imposed. One of the reasons why it was imposed was to restrict the profiteering that was going on. Can it be suggested to-day that the profiteering has ceased? Have we not been informed from the Front Bench that the Cabinet are giving this matter their careful consideration, Having regard to the great dissatisfaction that exists in the country because of the high price and the profiteering that prevail? So far as one can judge from the prices
profiteering exists as much to-day as it has ever done during the War, and while that continues how can it be unfair to urge at this juncture that a tax that had for its purpose the taking for public purposes of money made in this manner should not be continued during the current year as it has been during the years that have just passed by?
There is another aspect of the case which is worth emphasising. We have not passed away from war conditions in the sense that we are able to meet current expenditure without borrowing, we have still to borrow in the peace Budget in order to meet current expenditure. I would suggest that it is most unwise from the point of view of finance that we should, during the time we have to borrow to meet current expenditure, reduce a duty of this description. It has been pointed out that there is no Member of this House who has anything to say in favour of the man who is making abnormal profits, but that is the only kind of man we wish to touch. If it is decided to give consideration to the people in business, who after all are only doing a legitimate trade, then that can be done by some adjustment of the tax apart from the method of taking off 50 per cent. of the taxation previously imposed. It will be easy to introduce some Clause or paragraph giving consideration to the new business, whereby those who are engaged in it should not be so unfairly handicapped compared with older businesses as they have been. All these phases of the situation can be met and the full 80 percent retained, which would have enabled us to get a very substantial amount from those who undoubtedly at the moment are indulging in profiteering, which is just as rife and as brutal to-day as anything that has taken place in the War time. I have here a Press cutting of a circular issued by a Cardiff firm of ship-owners who are seeking to raise capital to buy a vessel of just over 5,000 tons dead weight which a short time ago was purchased for £100,000. Is there anybody in this Committee who purports to suggest that that £30,000 extra should not be subject to the tax of 80 per cent. seeing that that price is only possible because of the abnormal conditions which exist at the present moment; and in the circular it is stated, as an inducement for people to invest their money,
with the reduction in the Excess Profits Duty we look for a very good return in the shape of dividends and a rise in the market value of the shares before long.
This reduction in the Excess Profits Duty is the direct inducement to these people, and they are taking the advantage of it so far as these new ventures are concerned.
But it is said that if we continue this 80 per cent. we shall be seriously handicapping the industry in this country, and that the money is wanted in order to increase the capital of the concerns themselves. How can that be, to any great extent, when we read every day of firms increasing their capital holdings without a single extra penny being put into the concern by inflating their stock? We are continually being reminded of things of that description taking place, and if the firms are really in difficulty from the point of view of working capital, how is it possible to develop the concerns on the lines suggested? It seems to me, from the point of view of really sound finance, that the 80 per cent. tax should have been retained; if we allow those who have been making huge profits— and it can be adjusted to meet the circumstances of those who are not making undue profits with full regard to those who are handicapped by the defects of the system in the past—to receive this reduction of 50 per cent. on the previous level we are simply making them a present of that amount, and then permitting them to invest it in War Loan, on which the nation will be called to pay interest in the future. That is not sound finance. It is not good for the future of this country, and we ought to insist on the full 80 per cent. being taken, ending the Clause in such a fashion as to give relief to those on whom it pressed unfairly and harshly, as far as new businesses are concerned. Speaking on behalf of the Labour party, we cannot withdraw our opposition to this proposal. We think it essential in the best interests of the country that the Excess Profits Duty should be continued at 80 per cent. for some time longer. We recognise that some other proposal would have to be forthcoming sooner or later, because it is a war measure, and peace must be subject to some adjustment. But the time of adjustment is not yet, especially having regard to the fact that we are still borrowing money in order to meet our current expenditure at the moment.

Mr. FRANCE: Yesterday in one of those rare moments when we find the House facing the serious realities of things there
was general agreement that the most important consideration with regard to the industrial life of the country was to get down to the work of manufacture and production and to stimulate it as far as we possibly could. I take it that the Chancellor of the Exchequer, in reducing this tax from 80 to 40 per cent. has no feeling or sentiment whatever of preference or desire to let off anyone with regard to taxation itself. He desires to do something which he believes will encourage businesses to be conducted on more efficient and less wasteful lines, and that the money which is made in those businesses should be put into their development for the future advantage of the country, and I do wish that those who speak from the Labour benches, fund my hon. Friend who spoke from the Front Bench this afternoon in opposition to this Clause, would apply their minds rather more to those who are the real criminals, if I may use the word, in regard to profiteering than simply to be asking that the whole of the excess profits from these businesses should be taken. There are two classes of profiteers who have not been touched by the Excess Profits Tax. Those individuals, journalists and the like—and I think my hon. Friend on the Front Bench who has been busily, and I hope lucratively employed during the War in journalistic enterprises to the great advantage- of his own income, is not one of those who had to pay the Excess Profits Tax—are one class of individuals who made large sums out of the War, by writing about the War. They have been let off altogether. But there is another class referred to by an hon. and learned Friend, one of the Members for Glasgow, who showed a lamentable ignorance—for Scotland—of what is contained in the Psalms. I am sorry that the Chancellor of the Exchequer was not in his place at the time. There is one class of men which has perhaps been more responsible for profiteering than any other in this country. They are men who have escaped almost altogether Income Tax and Excess Profits Tax.
They are represented by the type of man who goes outside his business, makes no return from the point of view of income, speculates in something that is outside his business, and is allowed to escape under the plea that it is an increment in the value of capital. Men have gone into a business of which they have had no previous knowledge, have tainted that business with their own excesses, and finally have
escaped taxation. In the food trade it has been done over and over again. Men have got to know that there is almost certainly to be a rise in the price of an essential Commodity. They have plunged into the markets, bought shipments of goods, and sold them at a profit. The goods have been sold a second time at a profit, and all the time the price has been sent up. I have not the slightest doubt that many of them have escaped Income Tax. They have, in fact, escaped both Income Tax and Excess Profits Tax. I wish the Chancellor of the Exchequer could devise some means of tackling this kind of profits. There is the case of shipowners who have sold ships. I know of one case in particular, where the person concerned was boasting that he had sold ships at five times the sum he paid for them. If these ships were lost in the course of the War, and had to be replaced, I can quite understand it being necessary to regard the ships as something worth very much more than they cost to build. But many of these people have gone out of the shipping trade, have sold their ships, and have gained for themselves and distributed to their shareholders increment value in their shares, none of which has been liable to Income Tax, and on none of which Excess Profits Tax has been paid. If there were a general combinaiton of effort on the part of the Labour party and everyone else in this House to back and assist the Chancellor of the Exchequer in reaching such men, we should do some real service to the country and to taxation. But the making of a general statement, particularly by those who do not know very much about business, who look upon it simply from a theoretical or political standpoint, and advocate profits being taxed up to the hilt regardless of much-needed developments, seems to me to miss the mark, and their suggestions are not of much value either to the Chancellor of the Exchequer or the nation. I urge very strongly that there is this loophole with regard both to Income Tax and excess profits, that there are men selling goods not in their own ordinary line of business, thereby escaping both Income Tax and Excess Profits Tax, and that upon them the Chancellor of the Exchequer ought not only to have his eye but to put his hand.

Major E. WOOD: I want to make only a few remarks before we divide on this Clause. I shall regret it if the Labour
party carry out their express decision of voting against the Clause. I and a great many others will feel that if they do that they will be acting on what is, if I may say so without offence, a false issue. Nobody could have listened to this Debate, which has been both valuable and instructive, without having recognised that there- were two main lines of argument running through it. One was consideration of the value of the Excess Profits Tax as what I may call an engine of taxation, and the other was the consideration of the whole question of profiteering. If I at all correctly interpret the view held by the great majority in the Committee, including many on the Labour Benches, I think it would not be inaccurate to say that Excess Profits Tax is a bad engine of taxation, but at the same time in all parts of the House there has been expressed a most determined and strong feeling on the subject of profiteering. Therefore, when hon. Members vote against this Clause, they will be voting on what a great many of them know to be a bad engine of taxation, because of something else that they, as-well as the rest of us, would like to tackle by the best methods possible. I do not think it is foreign to this discussion to bear in mind, and to have always before our mind, the strength of the feeling that exists up and down the country on the question of profiteering. I heard an hon. Member speaking from the Labour Benches just now express the view that in a short time the saying, "What Lancashire thinks to-day England will think to-morrow," will be revised in favour of a new edition, "What South Wales thinks to-day England will think to-morrow." We have a saying in Yorkshire, "What Yorkshire thinks this morning, England thinks this afternoon." I can only say for the West Hiding of Yorkshire that it is impossible to go to a single public meeting or to meet anyone in that industrial part of England without having profiteering thrown at your head in and out of season. Let us clear our minds as to what we mean by profiteering. I have been told by a friend of mine that he knew a shipowner— I shall not give any names—who, when he had his friends to dine with him, as a great privilege unlocked a safe in his room, and as soon as the safe door was open the floor was covered with Treasury notes that he had hoarded up for fear of having to pay Excess Profits Duty.

Mr. CHAMBERLAIN: Can my hon. Friend give me that gentleman's name? It is a case for investigation by the legal advisers of the Department.

Major WOOD: I will certainly place my right hon. Friend, in confidence, in communication with my informant, and he will then be able to take whatever action he may think fit. I would say in passing to the Labour Members that they should not lose sight. of the fact that under this Budget, by virtue of Income Tax and Death Duties, even the profiteer is by no means escaping without a very heavy mulct on the profits he has made. Apart from that, I would like to press on the Chancellor of the Exchequer that I believe the right course is the course that he is pursuing in this Clause. I agree with an hon. Friend of mine who represents one of the Divisions of Glasgow, in thinking that the whole system of Excess Profits is bad and should be removed, but I would couple that statement with the taking of such steps as would make it clear to the country that the Government and the Chancellor of the Exchequer are determined by every means in their power to reach the real profiteer. I do not know how to define the real profiteer, but I am convinced it can be done. I hope it will not be left to the Income Tax Commission to deal with this question, but that it is one of the matters to be brought within the purview of the Select Committee, in order that they may consider whether this tax, or any other edition of it, may not be suitably included as a remedy for the evils of which we all complain. I most earnestly press my right hon. Friend to bear in mind that he has to consider something more than the finance and the economics of it. He is up against what is nothing less than a psychological problem. There is a suspicion and a belief that a great deal of this profiteering is going on. Let us at the earliest moment get at the facts, but let us not vote on what, I say again, is a false issue, in favour of what I believe to be a wholly vicious form of taxation.

Mr. CHAMBERLAIN: My hon. and gallant Friend has put very clearly and very temperately what has been in the minds of many hon. Members—the fact, not that we want to tax any portion of the kind of profits of which my hon. Friend speaks, but that these are profits which ought not to be made at all. They are profiteerings of an illegitimate kind, with a consequent rise in prices and a general rise in the cost
of living such as it is the wish of all of us to stop. I would gladly receive any suggestion from the Committee on profiteering. Both I and my colleague will be glad of any help that the House or the Select Committee can give us in showing how that illegitimate profiteering can be made to cease. I would add for myself that in the midst of the many difficult problems of taxation that confront us I shall not be ungrateful for practicable suggestions as to methods of raising additional revenue. There is one word I wish to say to hon. Gentlemen opposite who have announced their intention of voting against this Clause. Do they understand the effect of their vote? [HON. MEMBERS:" Of course we do!"] Perhaps other Members may not, and they will pardon me for telling the rest of the House. They are going to vote for the termination of the Excess Profits Duty.

Captain W. BENN: The right hon. Gentleman has put a dilemma which is very common indeed. I am not going to vote against the Clause at all, because I am in favour of the Excess Profits Duty in this form, but I would point out to those who intend, for reasons which seem to them good, to vote against the Clause, that they are being compelled to vote for an absurdity, or shall I say a paradox, in order to give emphasis to opinions which they hold. Really, the point which the Chancellor of the Exchequer has sought to make against them is not really a point at all. The hon. Member for Holderness (Captain Stanley Wilson) is an old Parliamentary hand, and he knows that that sort of dilemma frequently faces us. The Chancellor of the Exchequer tried, I think, to elude the point generally made this afternoon by saying that where a man made illicit profits he hoped to check that by all means.

Mr. CHAMBERLAIN: Illegitimate.

Captain BENN: not know that there is any difference in this matter between illegitimate and illicit. Every speaker from the other side of the House pointed out that during the War large sums of money have been accumulated and which the Chancellor is not proposing to tax. That accumulation is, I venture to say, an affront to the good feeling of this country. Very great sacrifices have been made and willingly by all classes, and the thought that while others have been making the ultimate sacrifice some have
been, consciously or unconsciously, accumulating vast wealth is an affront to the best opinion of the country. Although the Chancellor's motives are no doubt excellent in attempting to relieve industry for the future by reducing the Excess Profits Tax he has in his own speech confessed that the Government is quite unable, no doubt for excellent reasons, to take toll, and it should be a big toll, of the profits accumulated.

Mr. HOGGE: The Chancellor, in his reply, wanted the House clearly to understand what we were doing in dividing on this Clause. I also want to put my side of the matter. Nearly everybody who has spoken is against the Excess Profits Duty. If they come into the Lobby with us they will get rid of the tax.

Question put, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 294; Noes, 37,

Division No. 69.]
AYES.
[6.30 p.m.


Adkins, Sir W. Ryland D.
Coats, Sir Stuart
Hickman, Brig-General Thomas E.


Agg-Gardner, Sir James Tynte
Cockerill, Brigadier-General G. K.
Hilder, Lieut.-Colonel F.


Allen, Colonel William James
Colfox, Major W. P.
Hoare, Lt.-Col. Sir Samuel J. G.


Archdale, Edward M.
Colvin, Brigadier-General R. B.
Hohler, Gerald Fitzroy


Armitage, Robert
Coote, Colin R. (Isle of Ely)
Hood, Joseph


Ashley, Col. Wilfred W.
Coote, William (Tyrone, S.)
Hope, Harry (Stirling)


Astor, Major Hon. Waldorf
Cope, Major W. (Glamorgan)
Hope, James Fitzalan (Sheffield)


Austin, Sir H.
Cory, Sir Clifford John (St. Ives)
Hopkins, J. W. W.


Baldwin, Stanley
Cory, Sir James Herbert (Cardiff
Hopkinson, Austin (Mossley)


Balfour, George (Hampstead)
Courthope, Major George Loyd
Horne, Edgar (Guildford)


Balfour, Sir Robert (Partick)
Craig, Captain Charles C. (Antrim)
Horne, Sir Robert (Hillhead)


Banbury, Rt. Hon. Sir F. G.
Craig, Col. Sir James (Down, Mid.)
Howard, Major S. G.


Banner, Sir J. S. Harmood-
Craik, Right Hon. Sir Henry
Hughes, Spencer Leigh


Barlow, Sir Montague (Salford, S.)
Croft, Brig.-General Henry Page
Hunter, Gen. Sir A. (Lancaster)


Barnes, Rt. Hon. G. N. (Gorbals)
Davidson, Major-Gen. Sir John H.
Hunter-Weston, Lieut.-Gen. Sir A. G.


Barnes, Major H. (Newcastle, E.)
Davies, M. Vaughan- (Cardigan)
Hurd, P. A.


Barnett, Captain Richard W.
Davison, Sir W. H. (Kensington)
Jackson, Lieut.-Col. Hon. F. S. (York)


Barnston, Major Harry
Dawes, J. A.
Jephcott, A. R.


Barton, Sir William (Oldham)
Denison-Pender, John C.
Jesson, C.


Beckett, Hon. Gervase
Dennis, J. W.
Jodrell, N. P.


Bell, Lieut.-Col. W. C. H. (Devizes)
Dewhurst, Lieut.-Com. K.
Johnstone, J.


Bellairs, Com. Carlyon W.
Doyle, N. Grattan
Jones, Sir Edgar R. (Merthyr Tydvil)


Benn, Sir Arthur S. (Plymouth)
Du Pre, Colonel W. B.
Jones, J. Towyn (Carmarthen)


Benn, Com. Ian Hamilton (Greenwich)
Edgar, Clifford
Joynson-Hicks, William


Bennett, T. J.
Eyres-Monsell, Commander
Kellaway, Frederick George


Bethell, Sir John Henry
Falle, Major Sir Bertram Godfray
Kelly, Major Fred (Rotherham)


Birchall, Major J. D.
Farquharson, Major A. C.
Kerr-Smiley, Major P.


Bird, Alfred
Fell, Sir Arthur
King, Commander Douglas.


Blades, Sir George R.
Fisher, Rt. Hon. Herbert A. L.
Kinloch-Cooke, Sir Clement


Blair, Major Reginald
FitzRoy, Capt. Hon. Edward A.
Knight, Captain E. A.


Blake, Sir Francis Douglas
Flannery, Sir J. Fortescue
Lane-Fox, Major G. R.


Borwick, Major G. O.
Forestier-Walker, L.
Law, A. J. (Rochdale)


Bowles, Col. H. F.
Foxcroft, Captain C.
Law, Right Hon. A. Bonar (Glasgow)


Bowyer, Captain G. W. E.
France, Gerald Ashburner
Lister, Sir R. Ashton


Boyd-Carpenter, Major A.
Fraser, Major Sir Keith
Lloyd, George Butler


Bramsden, Sir T.
Gange, E. S.
Locker-Lampson G. (Wood Green)


Brassey, H. L. C.
Ganzoni, Captain F. C.
Locker-Lampson, Com. O. (Hunt'don)


Breese, Major C. E.
Gardiner, J. (Perth)
Lorden, John William


Bridgeman, William Clive
Gardner, E. (Berks, Windsor)
Lort-Williams, J.


Briggs, Harold
Gibbs, Colonel George Abraham
Lowther, Major C. (Cumberland, N.)


Brittain, Sir Harry E.
Gilmour, Lieut.-Colonel John
Lyle, C. E. Leonard (Stratford)


Broad, Thomas Tucker
Glanville, Harold James
M'Donald, Dr. B. F. P. (Wallasey)


Brown, Captain D. C. (Hexham)
Glyn, Major R.
Mackinder, Halford J.


Buchanan, Lieut.-Colonel A. L. H.
Goulding, Rt. Hon. Sir E. A.
M'Laren, R. (Lanark, N.)


Bull, Right Hon. Sir William James
Gray, Major E.
McMicking, Major Gilbert


Burdon, Colonel Rowland
Greame, Major P. Lloyd
Macquisten, F. A.


Burn. Colonel C. R. (Torquay)
Green, J. F. (Leicester)
Maddocks, Henry


Butcher, Sir J. G.
Greene, Lt.-Col. W. (Hackney, N.)
Magnus, Sir Philip


Campbell, J. G. D.
Gregory, Holman
Mallaby-Deeley, Harry


Carew, Charles R. S. (Tiverton)
Gretton, Col. John
Mallalieu, Frederick William


Carr, W. T.
Griggs, Sir Peter
Malone, Col. C. L (Leyton, E.)


Carter, R. A. D. (Manchester)
Gritten, W. G. Howard
Malone, Major P. (Tottenham, S.)


Casey, T. W.
Guest, Maj. Hon. O. (Leic, Loughboro')
Marks, Sir George Croydon


Cautley, Henry Strother
Guinness, Capt. Hon. R. (Southend)
Marriott, John Arthur R.


Cayzer, Major H. R.
Guinness, Lt.-Col. Hon. W.E. (B. St. E.)
Martin, A. E.


Cecil, Rt. Hon. Evelyn (Aston Manor)
Hall, Lieut.-Col. Sir Fred. (Dulwich)
Mildmay, Col. Rt. Hon. Francis B.


Cecil, Rt. Hon. Lord Hugh (Oxford U.)
Hallas, E.
Mitchell, William Lane-


Cecil, Rt. Hon. Lord R. (Hitchin)
Hamilton, Major C. G. C. (Altrincham)
Molson, Major John Elsdale


Chamberlain, Rt. Hon. J. A. (Birm., W.)
Hancock, John George
Mond, Rt. Hon. Sir Alfred Moritz


Chamberlain, N. (Birm., Ladywood)
Haslam, Lewis
Moreing, Captain Algernon H.


Cheyne, Sir William Watson
Henderson, Major V. L.
Morrison, H. (Salisbury)


Child, Brig.-General Sir Hill
Henry, Denis S. (Londonderry, S.)
Morrison-Bell. Major A. C.


Clay, Capt. H. H. Spender
Herbert, Denniss (Hertford)
Mosley, Oswald


Mount, William Arthur
Rendall, Atheistan
Turton, Edmund Russborough


Murchison, C. K.
Roberts, Sir S. (Sheffield, Ecclesall)
Waddington, R.


Murray, Lt.-Col. Hon. A. C. (Aberdeen)
Robinson, S. (Brecon and Radnor)
Walker, Colonel William Hall


Murray, Hon. G. (St. Rollox)
Robinson, T. (Stretford, Lanes.)
Ward. Colonel L. (Kingston-upon-Hull)


Murray, William (Dumfries)
Rodger, A. K.
Ward, W Dudley (Southampton)


Nail, Major Joseph
Rogers, Sir Hallewell
Wardie, George J.


Neal, Arthur
Roundell, Lieut.-Colonel R. F.
Warner, Sir T. Courtenay T.


Newman, Major J. (Finchley, Mddx.)
Rowlands, James
Watson, Captain John Bertrand


Newman, Sir R. H. S. D. (Exeter)
Royds, Lt.-Col. Edmund
Westen, Colonel John W.


Nicholl, Com. Sir Edward
Samuel, A. M. (Farnham, Surrey)
Wheler, Colonel Granville C. H.


Nield, Sir Herbert
Samuel, Rt. Hon. Sir H. (Norwood)
White, Col. G. D. (Southport)


Norman, Major Rt. Hon. Sir Henry
Samuel, S. (Wandsworth, Putney)
Whitla, Sir William


Norris, colonel Sir Henry G.
Sanders, Colonel Robert Arthur
Whittaker, Rt. Hon. Sir Thomas P.


Norton-Griffiths, Lt.-Col. Sir J.
Scott, Leslie (Liverpool, Exchange)
Williams, Lt.-Com. C. (Tavistock)


Oman, C. W. C.
Scott, Sir S. (Marylebone)
Williams, Col. Sir R. (Dorset, W.)


O'Neill, Capt. Hon. Robert W. H.
Seager, Sir William
Williamson, Rt. Hon. Sir Archibald


Ormsby-Gore, Hon. William
Seddon, J. A.
Willoughby, Lt.-Col. Hon. Claud


Palmer, Major G. M. (Jarrow)
Shaw, Hon. A. (Kilmarnock)
Wills, Lt.-Col. Sir Gilbert Alan H.


Palmer, Brig.-Gen. G. (Westbury)
Shaw, Captain W. T. (Forfar)
Wilson, Capt. A. Stanley (Hold'ness)


Parker, James
Shortt, Rt. Hon. E. (N'castle-on-T., W.)
Wilson, Col. M. (Richmond, Yorks.)


Parry, Major Thomas Henry
Smithers, Alfred W.
Wilson-Fox, Henry


Pearce, Sir William
Sprot, Colonel Sir Alexander
Wolmer, Viscount


Peel, Lt.-Col. R. F. (Woodbridge)
Stanier, Captain Sir Beville
Wood, Major Hon. E. (Ripon)


Pennefather, De Fonblanque
Stanley, Colonel Hon. G. F. (Preston)
Wood, Sir J. (Stalybridge and Hyde)


Perkins, Walter Frank
Starkey, Capt. John Ralph
Wood, Major S. Hill- (High Peak)


Perring, William George
Steel, Major S. Strang
Woolcock, W. J. U.


Philipps, Sir O. C. (Chester)
Stephenson, Colonel H. K
Worsfold, T. Cato


Pilditch, Sir Philip
Stewart, Gershom
Worthington Evans, Rt. Hon. Sir L


Prescott, Major W. H.
Strauss, Edward Anthony
Yeo, Sir Alfred William


Pulley, Charles Thornton
Sugden, W. H.
Young, Sir F. W. (Swindon)


Purchase, H. G.
Sykes, Col. Sir A. J. (Knutsford)
Young, William (Perth and Kinross)


Ramsden, G. T.
Sykes, Sir C. (Huddersfield)
Younger, Sir George


Ratcliffe, Henry Butler
Talbot, G. A. (Hemel Hempstead)



Raw, Lieutenant-Colonel Dr. N.
Terrell, Capt. R. (Henley, Oxford)
TELLERS FOR THE AYES.ߞ Lord


Rawlinson, John Frederick Peel
Thomas-Stanford, Charles
Talbot and Captain F. Guest


Rees, Sir J. D. (Nottingham. E.)
Townley, Maximilan G.



Reid, D. D.
Tryon, Major George Clement



NOES.


Adamson, Rt. Hon. William
Graham, W. (Edinburgh)
Sitch, C. H.


Arnold, Sydney
Griffiths, T. (Pontypool)
Smith, W. (Wellingborough)


Bell, James (Ormskirk)
Grundy, T. W.
Spoor, B. G


Bowerman, Right Hon. C. W.
Guest, J. (Hemsworth, York)
Swan, J. E. C.


Bromfield, W.
Hall, F. (Yorks, Normanton)
Thomas, Brig.-Gen. Sir O. (Anglesey)


Cairns, John
Lunn, William
Tootill, Robert


Carter, W. (Mansfield)
Newbould, A. E.
Wignall, James


Crooks, Rt. Hon. William
Richardson, R. (Houghton)
Williams, J. (Gower, Glam.)


Davies, Alfred (Clitheroe)
Roberts, F. O. (W. Bromwich)
Young, Robert (Newton, Lanes.)


Davison, J. E. (Smethwick)
Sexton, James



Devlin, Joseph
Shaw, Tom (Preston)
TELLERS FOR THE NOES.—Mr.


Galbraith, Samuel
Short, A. (Wednesbury)
T. Wilson and Mr. Hogge.

CLAUSE 25.—(Decrease of Rate of Excess Mineral Sights Duty.)

(1) Section forty-three of the principal Act(which relates to Excess Mineral Bights Duty)shall have effect as if forty per cent. of the excess were substituted as the rate of duty for eighty per cent. for any accounting year commencing on or after the first day of January, nineteen hundred and nineteen, or, in the case of an accounting year which commenced before that date but ends after that date, as if forty per cent. were substituted for eighty per cent. as respects so much of the excess as may be apportioned under this part of this Act to the part commencing on that date.

(2). The proviso to Section twenty-one of the Finance Act, 1917, shall apply to any accounting year in respect of which or any part of which Excess Mineral Rights Duty is payable at the rate of forty per cent., as it applies where the said duty is payable at the rate of eighty percent.

Motion made, and Question proposed
That the Clause stand part of the Bill.

Mr. HOGGE: This Clause deals with the decrease of rate of the Excess Mineral
Rights Duty and substitutes 40 per cent. for 80 per cent. as in the case of the Excess Profits Tax in Clause 24. Since this Clause has been set down and circulated we have had the Report of Mr. Justice Sankey's Commission on the question of the nationalisation of the coal mines and on the question of royalties on minerals in general, and there is one significant thing about that Report which, I think, we ought to bear in mind in connection with this Clause, and that is that, on this point at any rate, every member of the Sankey Commission was unanimous as to the basis upon which royalties should be purchased by the State. The suggestion there made was that the basis of acquisition should be the actual amount received by way of royalties, minus this Excess Mineral Eights Duty. If that is so, let us look and see what the result will be to the State if Clause 25 is allowed to-
stand as it is now. What the Clause does first of all is to give a reduction from 80 to 40 per cent., and that must, obviously, mean a reduction in revenue to the State. In the second place, it is bound to increase by the same 40 per cent. the amount which the owners would receive, and that means that when the State carries out the Sankey Commission Report, to which the Government is committed, the State is going to have to pay by way of compensation an amount increased by the 40 per cent. by which the 80 per cent. is now being reduced.
What is the suggestion in the Report of the Sankey Commission? It is a fifteen years' purchase of the amount of these royalties, and therefore, if my right hon. Friend vends 40 per cent. now in this Excess Mineral Rights Duty, he gives the owners of these royalties the vending of an extra 40 per cent. later on, and if the State purchases them on the basis of fifteen years' purchase, he afterwards pays fifteen years' purchase of the full amount. I am certain my right hon. Friend has not looked at it from that point of view. He may reply that the Government have not explicitly given to the House their decision as to what they are going to do as the result of the Sankey Report, but I am putting this to them, that the Government are committed to the nationalisation of royalties in any event. If, therefore, the Government is committed to that, my right hon. Friend is giving the royalty owners a great concession now and is imposing upon the State in future, by purchasing at a huge rate, a value which is much greater because it gives this concession Therefore, I am suggesting now that if previous arguments are not weighty enough here is a special argument dealing with a subject which is obviously in the melting-pot, which is at the root of a great many social questions, involving arguments that we have had in this House over and over again. Why cannot he, therefore, leave this in this case until the Government have absolutely given a decision with regard to nationalisation, because unless they do he is making a present of this reduction to the owners of royalties, a reduction which I do not think they are entitled to have, and I feel again that it is our duty to oppose this Clause standing part of the Bill.

Mr. RAFFAN: I hope the Chancellor of the Exchequer will not persevere with this
proposal. I am quite sure he would not have agreed to any reduction of the Excess Profits Tax, when revenue is so urgently necessary, had it not been for the arguments which were adduced from all parts of the House in the Debate just concluded. We were told that if this sum passed to the Exchequer it could not be retained for purposes of business expansion, which are still more necessary, and that therefore, urgent as it is to maintain the national revenue, it is still more urgent that industry and commerce should be fructified by these sums being utilised for the purposes of capital expenditure. I must say that I felt that that was a very strong argument, but it does not apply in this case. In the case of mining royalties that is not an ordinary profit from industry. That in its present form is a levy upon industry. It may be true that in. certain special cases the person who is in receipt of that income may apply it for the purposes of investment. Still, in the main he is not a person engaged in industry, and it may well be that he may use this concession which the Chancellor of the Exchequer makes to him merely for his own personal expenditure, and matters of that kind, which I am sure we have no desire to encourage. On the other hand, it was argued with very great force that the Excess Profits Tax upon industry has had a very material effect in raising prices and that, therefore, it was necessary to allow this concession to be made, but here again there can be no question about the price of coal being raised in any way whatsoever because this duty persists.
Therefore it appears to me that altogether apart from the considerations raised by my hon. Friend there is no reason in the national interest why the concession should be made. It is a concession which is made to the landlord interest- It is a large sum of money, and whatever the sum may be it is a sum presently accruing to the Exchequer, and there is no national benefit which can be offset against that because of any assistance given to the development of commerce. I appeal to the Chancellor of the Exchequer, at any rate, to hold his hand for the present year, because whatever this sum may be, it does mean that if you are to nationalise royalties and pay compensation to royalty-owners, I say quite frankly for myself that, if this matter comes before the House, I am in agreement with the representatives of the Labour party and the Commission who
say that in their view mining royalties ought to accrue to the State, and that compensation ought not to be paid. I am not sufficiently sanguine to think that we should be able to carry that through the present House of Commons, and I assume, at any rate, that the Chancellor of the Exchequer is not likely to advise action upon those lines. Therefore, if you purchase at fifteen years' purchase, or at ten years' purchase, it means that if this remission now amounts to, say, £100,000, the right hon. Gentleman is not merely making a present of £100,000 to the landowners, but he is also making a present of £1,000,000 if he purchases at ten years' purchase. Therefore, I appeal to him not to persist in this proposal. If it is persisted in, I hope, in spite of the logical dilemma in which the right hon. Gentleman, with his usual ability, placed the Committee, that as a protest against this concession to the landlord interest, at any rate, a Division will be registered. But I should hope that on fuller consideration the Chancellor of the Exchequer might see his way not to proceed with the proposal at present, and if he cannot do that may I ask whether he can give some assurance to the House that, if he does persist in the proposal now, the sum will not be capitalised when you come, if you come, during the present year to buy out the royalty-owners?

Mr. CHAMBERLAIN: What the hon. Gentleman calls the logical dilemma in which I placed the House is, I am afraid, a logical dilemma which confronts me also, only it confronts me with more force than it does the hon. Member, because I am in a position of greater responsibility at the moment than are he and the hon. Gentleman who expressed his desire to vote against the Clause as a demonstration. I vote against the Clause, the Clause will go out, and if the Clause goes out the tax goes altogether—not 40 percent., but the whole 80 per cent. of the tax. That does not disturb the hon. Gentlemen opposite. They can record a protest knowing perfectly well that their vote will have no consequences, and—

Captain W. BENN: What the right hon. Gentleman—

Mr. HOGGE: May I—

Mr. CHAMBERLAIN: —and relying upon a majority of the House to prevent it having consequences which they would be the first to deplore. Now, having
finished my sentence, if either or both of the hon. Members would like to interrupt, I shall be pleased to hear what they have to say.

Captain BENN: I apologise for any apparent discourtesy, but what the right hon. Gentleman does not state is this: He has got the power to move that the tax should be imposed at the rate of 80 per cent., and we have not got that power.

Mr. HOGGE: I would be glad to see you out!

7.0 p m

Mr. CHAMBERLAIN: The hon. Gentleman would be glad to have us out in any case, even if it resulted in the royalty-owners getting relief from the tax. That would be a small evil to him, compared with the Government, with a majority of I do not know how many, continuing in office. But I cannot undertake at this stage to recast the Budget, to bring in new Resolutions, and to propose an altogether different tax. It is, therefore, this Clause or no tax at all, so far as I am concerned. But hon. Members raised a point which I will not say is out of order, or not germane to what we are doing, but which is really concerned with the arrangements which may be made in certain hypothetical contingencies hereafter, connected with the nationalisation of the mines, or, in particular, with the nationalisation of the ownership of the minerals as apart from the mines. If the Sankey Report is adopted as a basis for such a proposal, I think that quite clearly the intention of the Sankey Report ought not to be perverted by any changes which, in the interim between the presentation of their Report and the action of the House of Commons upon it, we may think it right to make, not in connection with the purchase of royalties, but in connection with the gentral system of taxation. Whatever may be the intention and meaning of the Sankey Report, if that Report is to be acted upon it ought not to be prejudiced by anything that we do now, and we ought not, by anything that we do now, to let it be supposed that there will be guaranteed to anyone something more than the Sankey Report recommended that he should have. What we do now ought not to prejudice the position through an incident which was not contemplated by the Sankey Commission or by us.

Mr. ADAMSON: The point that we are discussing at the moment is one which I
think demands more serious attention from the Chancellor of the Exchequer than it has received up to the present. The reason why there is excess profit so far as royalty owners are concerned is because in many cases the royalties are fixed on an ad valorem basis. The price of coal having increased during the course of the War, their royalties have increased. That has placed the royalty owners in the position of being able to maintain their average royalties notwithstanding the fact that the output has very seriously fallen. The income from royalties is one of the things that has remained stationary through the many changes that have taken place in the coal trade during the War. Undoubtedly, if the ideas of the majority of the Sankey Commission are to be given effect to, the fact that the Chancellor of the Exchequer is reducing the Excess Profits Tax from 80 per cent. to 40 per cent. will increase the price that is to be paid for buying out the royalty owners in the very near future. I do not think there is any doubt about that. There is so little doubt about it that, as I have said, it requires very serious attention. I quite agree that no action should be taken meantime, particularly by the Government, that will prejudice the case when that change is brought about, as I believe it will be in the near future. I think that, if the Chancellor finds it impossible to make the necessary change during the Committee stage, he could give us his undertaking that it will be done on Report. I do not think that any change should be made here in the Excess Profits Duty, in view of what is about to transpire. All the arguments that the Chancellor has used hitherto in favour of a reduction in the Excess Profits Tax, for the purpose of enabling employers of labour to have more money to develop their businesses, disappear, as was pointed out just now, so far as concerns the particular matter we are now discussing. Those arguments do not hold here, and, while voting against this Clause will put us in an illogical position, as the Chancellor has pointed out, unless we can get some assurance from him, to vote against the Clause is our only means of protesting against such a foolish proposal on the part of the Government. I hope that, before this discussion closes, we shall have some assurance from the Chancellor of the Exchequer that before we part with the Finance Bill
this matter will receive more serious consideration at his hands than it has secured up to the present.

Lord HUGH CECIL: I think the right hon. Gentleman the Member for West Fife, and also other hon. Gentlemen, are suffering from some confusion of thought. I cannot imagine that the Sankey Report intended that any mineral rights duty should be taken into consideration in respect of the purchase value of royalties, except such a mineral rights duty as would be an absolutely permanent part of our finance, and was, therefore, in the view of those who framed the Report, not to be reckoned as part of the property of the royalty owner.

Mr. RAFFAN: I think that if the Noble Lord will refer to the Report he will find that that was not dealt with, but that they desired that the Excess Profits Duty now in force should be taken into consideration.

Lord H. CECIL: There really is no clear distinction that can possibly be drawn between property in coal or land or any other of the gifts of nature. You may object to property in any gift of nature, but it certainly is mere muddle-headed-ness to say that property in coal is more or less open to criticism than property in the natural fertility of land. The idea, therefore, that you should first levy a tax of 80 per cent. on a particular form of property, and then estimate the purchase value of the whole property on the basis of what is left from the tax, really is to veil confiscation under confusion. It is merely to rely on the supposition that people are too stupid to understand that you are as dishonest as you are. Personally I should have thought that the reasonable way of valuing any property would be on its value irrespective of taxation. In any case, of course, what we do here, as the right hon. Gentleman pointed out, does not affect in any degree what we may afterwards do in our legislative capacity on the Report of the Sankey Commission. Whether we agree or disagree with it, we are not prejudiced by what we decide now. The right hon. Gentleman the Member for West Fife is mistaken in suggesting that the Chancellor of the Exchequer could do this on Report. No one can propose an increase of taxation, not even the Ministers of the Crown, except in Committee of the Whole House. There is no means, happily, of forcing a Government to levy a heavier tax on the subject than they
feel bound to advise the Crown that it ought to levy; and for hon. Members to vote against this Clause by way of protest is merely to maintain the doctrine that it ought to be possible to tax people even against the will of the Ministers of the Crown

Captain BENN: The Noble Lord's speech comes to this, that the power of this House of Commons to decide the incidence of taxation is nil. We are told that we cannot vote against the Clause, because if we do we wipe out the whole tax. No one desires to do that, but we consider it to be very unfair to reduce the tax on mineral rights, and we wish by voting to give expression to our opinion. The Chancellor of the Exchequer says that if we vote against the Clause we are simply taking away the whole tax. We say, "Why do you not increase it? "The Noble Lord says, "We cannot make him increase it." Where are we?

Lord H. CECIL: The Chancellor sits here to defend the rights of the taxpayer, not to add unnecessarily to his burdens.

Captain BENN: The Noble Lord is a great constitutional authority, but it is in order to defend the rights of the poor taxpayer that we desire that the House of Commons should decide the incidence of taxation, and so the Noble Lord's smoke-screen over the whole proposal does not really disguise it. He said that he never heard of any one taking into account the charges incumbent on property. Surely taxation is a charge. We cannot agree that, when a valuer values mineral rights, those rights would be equally valuable whether the taxation were 80 per cent. or only 40 per cent., and, therefore, we say that the action we are taking to-day in this matter is really prejudging to some extent the price which the public will have to pay for the mines if the Government makes up its mind to buy them and decides to nationalise the royalties. Another important point is with regard to oil. Oil is being produced as a result of expenditure voted by this House. I think £1,000,000 was given to the Ministry of Munitions for the purpose. Whose is that oil going to be, and, when it is got up, is it going to be taxed?

The CHAIRMAN: That is a matter for future legislation. I feel certain, from what happend last year or the year before, that there is no existing right to levy a
royalty on oil, so that we cannot go into that now. It could not be dealt with unless the House contemplated some future legislation.

Captain BENN: Do I understand you to say, Mr. Whitley, that this Clause, if passed, will confer no right on the Chancellor of the Exchequer to impose a tax on the oil produced from this private property?

Mr. CHAMBERLAIN: It would give no right to anybody—neither to the Government nor to any individual—to levy a charge on the property.

The CHAIRMAN: My point was that, remembering what happened on a certain Bill, it is really the case that in the absence of legislation there would be no such thing as a royalty on oil, and, there-tore, it cannot be brought into the present case except as a matter of future legislation.

Captain BENN: Supposing that the oil were raised, it would surely be a mineral, subject to all the rights and duties of an ordinary mineral. Do I understand that, even, then, if this Clause is passed, the Government would have no power to levy a royalty on it?

The CHAIRMAN: There would be no royalty.

Captain BENN: Supposing that the oil were held by the competent authority to be the property of the surface owner, does this Clause confer a right on the Government to levy a tax on the royalty?

The CHAIRMAN: The hon. and gallant Gentleman is putting to me a supposition as to something which does not exist. It seems to me, in the present state of the law—and what happened on the previous occasion shows it to be the case—that there is no such royalty right at present existing on British oil.

Captain BENN: I am sure the Committee will agree that this is a matter of some substance. Supposing we should desire that a tax of 80 per cent. or 40 per cent. should be levied on the royalties payable to the surface owners of such oil, what course should we take? Is it covered by this Clause or not?

The CHAIRMAN: That you cannot put now.

Captain BENN: It is a very great point of substance. Suppose, when the oil is raised, it is held that the owner is entitled to charge royalty—will the Chancellor of the Exchequer be entitled to tax the oil under this Clause?

The CHAIRMAN: The hon. Member is supposing something you cannot tackle without legislation.

Mr. A. WILLIAMS: The Noble Lord opposite seemed in his speech to be quite unable to understand that anybody who differed from him could be either intelligent or honest. He laid down the extraordinary proposition that no intelligent person could think that there was any difference between the ownership of the natural fertility of the surface of the land and the ownership of the minerals. One great difference is this, that the owner of the minerals, if he avails himself of the ownership to any purpose, destroys them, uses them up, and they are gone for ever; the ownership of the natural fertility of the surface which, no doubt, is an advantage to the owner at times in the using of it, does not destroy the property. There is therefore a grave difference, and it is astonishing that the Noble Lord, laying

down the law with such positiveness, entirely failed to appreciate it. There is the great difference, so far as the present tax is concerned, between the Excess Minerals-Tax and any other Excess Profits Tax that this tax cannot be said to interfere with trade or enterprise, whereas the Excess Profits Tax. on ordinary proprietors of businesses, has many advantages, but the disadvantage that it interferes with trade and enterprise. No such reason applies to the reduction of the tax on Excess Mineral Duties. Nothing of the sort applies. To continue it is no interference with the trade or enterprise of the country, and to remove it is simply throwing away so much revenue at a time when it is very greatly wanted and when it certainly could not fall upon any shoulders more able to bear it without suffering than the owner of the royalty on minerals. Therefore, it seems to me that it is quite unjustifiable to abolish this tax at the present time, and I for one shall register my vote as a protest against so doing.

Question put,
 That the Clause stand part of the Bill

The Committee divided: Ayes, 235; Noes, 57.

Division No. 70.]
AYES.
[7.20 p.m.


Agg-Gardner, Sir James Tynte
Casey, T, W.
Fraser, Major Sir Keith


Allen, Colonel William James
Cayzer, Major H. R.
Gange, E. S.


Archdale, Edward M.
Cecil, Rt. Hon. Evelyn (Aston Manor)
Ganzoni, Captain F. C.


Armitage, Robert
Cecil, Rt. Hon. Lord Hugh (Oxford U.)
Gardiner, J. (Perth)


Astbury, Lieut.-Com, F. W.
Cecil, Rt. Hon. Lord R. (Hitchin)
Gardner, E. (Berks, Windsor)


Astor, Major Hon. Waldort
Chamberlain, Rt. Hon. J. A. (Birm., W.)
Gilbert, James Daniel


Baldwin, Stanley
Cheyne, Sir William Watson
Gilmour, Lieut.-Colonel John


Balfour, George (Hampstead)
Clough, R.
Gray, Major E.


Balfour, Sir Robert (Partick)
Clyde, James Avon
Green, J. F. (Leicester)


Banner, Sir J. S. Harmood-
Coates, Major Sir Edward F.
Gretton, Colonel John


Barnes, Rt. Hon. G. N. (Gorbals)
Coats, Sir Stuart
Griggs, Sir Peter


Barnett, Captain Richard W.
Cockerill, Brigadier-General G. K.
Gritten, W. G. Howard


Barnston, Major Harry
Compton-Rickett, Rt. Hon. Sir J.
Guest, Capt. Hon. F. E, (Dorset, E.)


Barrand, A. R.
Conway, Sir W. Martin
Guinness, Capt. Hon. R. (southend)


Barton, R. C. (Wicklow, W.)
Cope, Major W. (Glamorgan)
Hallwood, A.


Beckett, Hon. Gervase
Cory, Sir Clifford John (St. Ives)
Hall, Lieut.-Col. Sir Fred. (Dulwich)


Bell, Lieut.-Col. W. C. H. (Devizes)
Cory, Sir James Herbert (Cardiff
Hallas, E.


Bellairs, Com. Carlyon W.
Courthope, Major George Loyd
Hamilton, Major C. G. C. (Altrincham)


Benn, Sir Arthur S. (Plymouth)
Craig, Captain Charles C. (Antrim)
Hancock, John George


Benn, Com. Ian Hamilton (Greenwich)
Craig, Col. Sir James (Down, Mid.)
Haslam, Lewis


Bentinck, Lt.-Col. Lord H. Cavendish-
Croft, Brig.-General Henry Page
Henderson, Major V. L.


Betterton, H. B.
Dalziel, Rt. Hon. Sir J. H. (Kirk'dy)
Henry, Denis S. (Londonderry, S.)


Birchall, Major J. D.
Davidson, Major-Gen. Sir John H.
Herbert, Denniss (Hertford)


Bird, Alfred
Davies, Alfred Thomas (Lincoln)
Hewart, Rt. Hon. Sir Gordon


Blades, Sir George R.
Davies, T. (Cirencester)
Hickman, Brig-General Thomas E.


Blair, Major Reginald
Dawes, J. A.
Hilder, Lieut.-Colonel F.


Blake, Sir Francis Douglas
Dewhurst, Lieut.-Com. H.
Hohler, Gerald Fitzroy


Boles, Lieut.-Colonel D. F.
Doyle. N. Grattan
Hope, Harry (Stirling)


Borwick, Major G. O.
Du Pre, Colonel W, B.
Hope, James Fitzalan (Sheffield)


Bowles, Col. H. F.
Edgar, Clifford
Hopkins, J. W. W.


Brassey, H. L. C.
Edwards, A. Clamant (East Ham, S.)
Hopkinson, Austin (Mossley)


Breese, Major C. E.
Eyres-Monsell, Commander
Home, Edgar (Guildford)


Bridgeman, William Clive
Falle, Major Sir Bertram Godfray
Howard, Major S. G.


Briggs, Harold
Farquharson, Major A. C.
Hughes, Spencer Leigh


Brittain, Sir Harry E.
Fell, Sir Arthur
Hurd, P. A.


Brown, Captain D. C. (Hexham)
Fisher, Rt. Hon. Herbert A. L.
Jackson, Lieut.-Col. Hen. F. S. (York)


Bull, Right Hon. Sir William James
FitzRoy, Capt. Hon. Edward A.
Jephcott, A. R.


Butcher, Sir J. G.
Flannery, Sir J. Fortescue
Jesson, C


Campbell, J. G. D.
Forestier-Walker, L.
Jodrell, N. P.


Carter, R. A. D. (Manchester)
Foxcroft, Captain C.
Johnson, L. S.


Jones, Sir Edgar R. (Merthyr Tydvil)
Nail, Major Joseph
Steel, Major S. Strang


Junes, J. Towyn (Carmarthen)
Neat, Arthur
Stephenson, Colonel H. K.


Jones, Wm. Kennedy (Hornsey)
Newman, Sir R. H. S. D. (Exeter)
Stewart, Gershom


Joynson-Hicks, William
Nield, Sir Herbert
Strauss, Edward Anthony


Kellaway, Frederick George
Norton-Griffiths, Lt.-Col. Sir J.
Sugden, w. H.


King, Commander Douglas
Oman, C. W. C.
Sutherland, Sir William


Kinloch-Cooke, Sir Clement
O'Neill, Capt. Hon. Robert W. H.
Taylor, J. (Dumbarton)


Knight, Captain E. A.
Parry, Major Thomas Henry
Thomas-Stanford, Charles


Knights, Captain H.
Pearce, Sir William
Townley, Maximilan G.


Lane-Fox, Major G. R.
Pennefather, De Fonblanque
Tryon, Major George Clement


Law, A. j. (Rochdale)
Perkins, Walter Frank
Turton, Edmund Russborough


Law, Right Hon. A. Bonar (Glasgow)
Perring, William George
Waddington, R.


Lewis, T. A. (Pontypridd, Glam.)
Philipps, Sir O. C. (Chester)
Ward, Colonel L. (Kingston-upon-Hull)


Lister, Sir R. Ashton
Pilditch, Sir Philip
Wardie, George J.


Lloyd, George Butler
Pretyman, Rt. Hon. Ernest G.
Watson, Captain John Bertrand


Locker-Lampson G. (Wood Green)
Pulley, Charles Thornton
Weston, Colonel John W.


Locker-Lampson, Com. O. (Hunt'don)
Ramsden, G. T.
Wheler, Colonel Granville C. H.


Lorden, John William
Ratcliffe, Henry Butler
White, Col. G. D. (Southport)


Lort-Williams, J.
Rawlinson, John Frederick Peel
Whitla, Sir William


Lowther, Col. C. (Lonsdale, Lancs.)
Reid, D. D.
Wild, Sir Ernest Edward


Mackinder, Halford J.
Richardson, Alex. (Gravesend)
Willey, Lt.-Col. F. V.


M'Laren, R. (Lanark, N.)
Robinson, S. (Brecon and Radnor)
Williams, Lt.-Com. C. (Tavistock)


McNeill, Ronald (Canterbury)
Robinson, T. (Stretford, Lancs.)
Williams, Col. Sir R. (Dorset, W.)


Macquisten, F. A.
Rodger, A. K.
Williamson, Rt. Hon. Sir Archibald


Maddocks, Henry
Rowlands, James
Willoughby, Lt.-Col. Hon. Claud


Maitland, Sir A. D. Steel.
Royds, Lt.-Col. Edmund
Wills, Lt.-Col. Sir Gilbert Alan H.


Mallalieu, Frederick William
Samuel, A. M. (Farnham, Surrey)
Wilson, Colonel Leslie (Reading)


Martin, A. E.
Samuel, S. (Wandsworth, Putney)
Wilson-Fox, Henry


Mildmay, Col. Rt. Hon. Francis B.
Sanders, Colonel Robert Arthur
Wolmer, Viscount


Mitchell, William Lane-
Scott, Sir S. (Marylebone)
Wood, Sir J. (Stalybridge and Hyde)


Mond, Rt. Hon. Sir Alfred Moritz
Seager, Sir William
Woolcock, W. J. U.


Moore-Brabazon, Lieut.-Col. J. T. C.
Shaw, Captain W. T. (Forfar)
Worsfold, T. Cate


Moreing, Captain Algernon H.
Shortt, Rt. Hon. E. (N'castle-on-T., W.)
Worthington-Evans, Rt. Hon. Sir L.


Morris, Richard
Smith, Harold (Warrington)
Yeo, Sir Alfred William


Morrison-Bell, Major A. C.
Smithers, Alfred W.
Young, Sir F. W. (Swindon)


Mount, William Arthur
Sprot, Colonel Sir Alexander
Younger, Sir George


Munro, fit. Hon. Robert
Stanier, Captain Sir Beville



Murchison, C. K.
Stanley, Colonel Hon. G. F. (Preston)
TELLERS FOR THE AYES.— Mr.


Murray, William (Dumfries)
Starkey, Capt. John Ralph
Dudley Ward and Lord E. Talbot


NOES.


Acland, Rt. Hon. Francis Dyke
Grundy, T. W.
Short, A. (Wednesbury)


Adamson, Rt. Hon. William
Guest, J. (Hemsworth, York)
Sitch, C. H.


Arnold, Sydney
Hall, F. (Yorks, Normanton)
Smith, W. (Wellingborough)


Bell, James (Ormskirk)
Harbison, T. J. S,
Swan, J. E. C.


Bonn, Capt. W. (Leith)
Hayday, A.
Thomas, Brig.-Gen. Sir O. (Anglesey)


Bowerman, Right Hon. C. W.
Hayward, Major Evan
Thorne, G. R. (Wolverhampton, E)


Bramsden, Sir T.
Hodge, Rt. Hon. John
Tootill, Robert


Briant, F.
Holmes, J. s.
Wallace, J.


Bromfield, W.
Johnstone, J.
Wignall, James


Carter, W. (Mansfield)
Kenworthy, Lieut.-Commander
Williams, A. (Consett, Durham)


Crooks, Rt. Hon. William
Lunn, William
Williams, J. (Gower, Glam.)


Davies, Alfred (Clitheroe)
Murray, Dr. D. (Western Isles)
Williams, Col. P. (Middlesbrough


Davison, J. E. (Smethwick)
Newbould, A. E.
Wilson, Rt. Hon. J. W. (Stourbridge)


Devlin, Joseph
Rae, H. Norman
Wilson, W. T. (Westhoughton)


Entwistle, Major C. F.
Rattan, Peter Wilson
Wood, Major Mackenzie (Aberdeen, C.)


France, Gerald Ashburner
Rendall, Athelstan
Young, Robert (Newton, Lanes.)


Galbraith, Samuel
Richardson, R. (Houghton)
Young, William (Perth and Kinross)


Glanville Harold James
Roberts, F. O. (W. Bromwich)



Graham, W. (Edinburgh)
Sexton, James
TELLERS FOR THE NOES.—Mr.


Griffiths, T. (Pontypool)
Shaw, Tom (Preston)
Hogge and Mr. Spoor


Question put, and agreed to.

Clauses 26 (Extension of Belief in Respect of Colonial Excess Profits Duty), 27 (Apportionment of Accounting Periods and Years), 28 (Interpretation), 29 (Suspension of New Sinking Fund), and 30 (Construction, Short Title, and Repeal) ordered to stand part of the Bill.

NEW CLAUSE.—(Income Tax on War Savings Certificates.)

Sub-section (2) of Section forty-seven of the Income Tax Act, 1918 (which provides for relief from Income Tax in the case of certain War Savings Certificates), shall have effect as
though "any Act" were substituted for" section forty-one of the Finance Act, 1918." — [Mr. Chamberlain.]

Brought up, and read the first time.

Mr. CHAMBERLAIN: I beg to move,
That the Claim be read a second time.
This Clause is consequential on a promise by my predecessor that any holder of War Savings Certificates for five years who desired to extend the period to ten years, should be allowed to do so, and this Clause is to give the same Income Tax relief for the additional five years as he
enjoys in respect of the first five years. Of course, I need not add that the extension of the time is optional on the part of the holder of the certificates. If he wishes to be paid off at the end of the five years he will be paid off.

Clause accordingly read a second time, and added to the Bill.

NEW CLAUSE.— (Tax on Income from Converted Government Securities.)

Where the income which any individual is required under the Income Tax Acts to include in a statement of his total income from all sources for the purposes of Income Tax or Super-tax for any year includes both—
 (i) interest received without deduction of Income Tax in respect of securities (in this Section referred to as "original securities") which have been accepted as the equivalent of cash in payment for fully-paid allotments of Four pounds per Cent. Victory Bonds or Four pounds per Cent. Funding Loan, 1960–90 (in this Section referred to as "substituted securities"); and
 (ii) interest taxed by deduction in respect of such substituted securities;
and the amount of the interest so included exceeds the full amount of the interest for a complete year on the original securities; then, if that individual so requires, the excess—
 (a). shall not be taken into account in ascertaining the total income from all sources of that individual for that year for the purposes of Income Tax or Super tax; but
(b). shall nevertheless be chargeable to Income Tax or Super-tax for that year at such rate or rates and subject to such reliefs, if any, as would be applicable if such excess constituted the highest part of an income equal in amount to the amount of the total income of that individual exclusive of such excess. — [Mr.Chamberlain.]

Brought up, and read the first time.

MR. CHAMBERLAIN: I beg to move,
That the Clause be read a second time.
The rights of conversion in connection with the new Loan will have the result that certain people whose tax was not deducted at the source will convert into a security where the tax is deducted at the source. Where the tax is not deducted at the source, it becomes payable a year later than where it is deducted at the source, and, therefore, the mere change from one form of security into the other would cause the interest on the security for two years to become chargeable in a single year. This might have been dealt with by exempting one year from the tax altogether. That would be an obviously extravagant thing to do, and unfair as
between tax-payer and tax-payer. The tax must be paid. But the transfer would have another effect. In certain cases it would cause the Income Tax payer's income for that particular year in which two years' interest became chargeable, to go to a higher point, and become chargeable on a higher scale. The object of this-Clause—I am not sure whether I am making it clear; it is a little complicated —is to provide that, where by the mere accident of conversion the man might become subject to a higher rate of tax, he shall not be charged at a higher rate.

Clause accordingly read a second time, and added to the Bill.

NEW CLAUSE.—(He-peal of Customs and Excise Duties on Sugar.)

Sections eight and nine of the Finance Act, 1918, and the Third Schedule to that Act are hereby repealed. — [Mr. W. Graham.]

Brought up, and read the first time.

Mr. W. GRAHAM: I beg to move,
That the Clause be read a second time.
Hon. Members will agree that it is practically impossible at this hour to advance any new argument in favour of the-repeal of this duty. All the arguments which were used in the case of tea are-usually pressed into service in the case of sugar, but this difference, I think, exists On the whole, the case for the repeal of the duty on sugar is stronger, from many points of view, than it is in the case of tea. Our first objection to this duty is, that it falls on an article which enters very largely into the dietary of the poorest classes of the community. By common consent, sugar plays a much larger part in the dietary of the poor than it does in that of those much better off, and to that extent this is a tax which falls with severe and unequal incidence on that section or the population least able to bear it. In the second place, we press very strongly for the repeal of this duty largely because the country has entered upon far-reaching schemes of child welfare, providing for the food of the children, in which connection sugar again plays a very large part. We hold that, under these two heads, there would, be a real gain, and not a loss, to the community by the repeal of the duty. But, quite apart from these arguments, which I readily concede have been used on many platforms for many years, there is also the consideration that sugar enters largely into industry to all intents and pur-
poses as a raw material. If the industries which depend to a material extent on sugar at the present moment were mainly or largely industries concerned with the turning out of luxuries, the ease would not be very strong, but in many industries sugar is urgently required, apart from any luxury consideration at all. The case for the repeal of the duty there is undeniably strong. If we want to facilitate the recovery of industry in this country, we want to remove, as far as possible, every tax which is penalising the raw material or the ingredients of that industry. Consequently, on these two grounds, first of all, the human ground, if I may so describe it, of taking taxation off an article which enters largely into food, and, secondly, on the public ground that this is an ingredient of industry, I beg to move the Second Heading of this Clause.

Mr. ARNOLD: As one who, for many years, has opposed the duty on sugar, I should like to support this Clause. The Sugar Duty is, in my opinion, a cruel and iniquitous tax—a tax which is most inequitable in its incidence. As my hon. Friend has pointed out, it falls with severity upon the poor, and especially those with large families, because the larger a man's family the more a man has to pay; in fact, the incidence of this duty is in inverse ratio to ability to pay. Those who are least able to pay have to pay most. That is totally inconsistent with the principle which runs through most of our taxation, or which ought to run through most of our taxation, and it is in direct opposition to the fundamental canon of sound taxation. This is all the more serious because the Sugar Duty now is extremely heavy. Let me look at the finance of this duty. There is to be raised by the Customs Duty on sugar, £38,500,000 and by the Excise Dutyonsugar£l,000,000, making a total revenue from the Sugar Duty this year of £39,500,000. In the year before the War, the revenue got from the Sugar Duty about £3,250,000, so that we are now raising from sugar somewhere about twelve times as much as we were raising before the War. The yield of no other tax has been increased to that extent, and I say it is a striking commentary on Coalition finance that the tax which has been increased most is a tax upon the food of the poor, and that at a time of extraordinarily high prices. I should be very interested to know what my right hon. Friend (Mr. Barnes), who is still a member of the War Cabinet, has to say
about this matter. Perhaps he will be good enough to intervene in the Debate. I remember very well in 1915, when he was in a position of greater freedom, and less responsibility, and a more moderate Sugar Tax than the present one was being discussed, he was then most indignant about it, and spoke of it, not, perhaps, so strongly as I do, but he went a good long way in arguing against it. I should like to know what set of circumstances has changed his view, because I assume he will now support it. How is it he is in favour of this higher duty now? I, personally, should be very interested to hear what he has to say on that.
This Sugar Duty, is taking out of the pockets of the poorer people something over £30,000,000 a year, or over £500,000 a week, and I say it does not require much imagination to realise what a burden that is on the household of the poor, where every penny has to be considered, and where every penny has its real value. The Sugar Duty, too, is particularly economically unsound, because sugar is not only a food, but it is a vital article of food. It is specially beneficial and nutritious to children, and, as regards workers, it is a great producer of physical energy. This duty is trenching on the margin of subsistence of hundreds of thousands of families, and at a time when the Government is constantly telling us they want an increased output of work. How can you get this if you are decreasing the industrial efficiency of the workers by a heavy tax on food? It cannot be done. The Government's position in this matter is totally inconsistent. If they want a bigger output, they should do everything they can to increase the physical efficiency of the workers, but taxes like this have a directly opposite effect, and that is all the more indefensible because of the abnormally high food prices at the present time. Owing to the great increase in the cost of living, hundreds of of thousands—I might say millions—of families have been driven down near, and right below, the level of subsistence. The Leader of the House said last night that, owing to the War, many members of the working classes are better off, but in ray view the majority—and I believe, if the thing were gone into statistically, the great majority—of the workers are, despite increased wages, worse off than before the War, owing to the extraordinarily high prices prevailing. It is utterly wrong to tax the necessities of life to those who already have not got
enough to live on. That is an argument which I myself, and other hon. Members who think with me, have ventured to address to the Treasury Bench from time to time in past years. No real reply has ever been forthcoming. No real reply, as a matter of fact, is possible. All that the Chancellor of the Exchequer can say, as I have no doubt he will say, is that he must have money. I say you can get money too dear, if you are getting it at the expense of health and efficiency. I have said before, and I say again, it is no use the Chancellor of the Exchequer saying he cannot get the money. He could get the money if he would exercise a little boldness and courage, and face the financial position as it ought to be faced. If he would reduce the enormous burden of war debt by a levy on capital, all these matters could be adjusted, and this relief could be given to the poorer classes.
There is one further point I would like to make, and it is this: When discussing the Tea Duty, the Financial Secretary got up and said, "Yes, but look how much we have increased direct taxation! Look how different the proportions are now between direct and indirect taxation as compared with what they used to be!" There really is nothing in that point at all. It used to be necessary, about the middle of last century, to maintain a certain balance—about half-and-half—between direct and indirect taxation. Obviously, there is nothing scientific at all in that notion, because the proportion between direct and indirect taxation has changed greatly, and was, in particular, being changed before the War. You cannot arrive at anything scientific, definite, or final by pointing to the relative proportion of indirect and direct taxation. I submit that you ought to levy your taxes on sound principles. A tax should be decided on three main principles: whether or not it is equitable, economically sound, and productive. If your tax is in accordance with these three principles, it is a good tax; if it is not in accordance with them, it is not a good tax. This Sugar Tax does not conform to these three principles. You have levied it not according to them, and quite irrespective of the proportion between direct and indirect taxation. It is a thoroughly bad tax, and I shall certainly vote against it.

Mr. A. M. SAMUEL: Does the hon. Gentleman realise that the figure he gave —£30,000,000—is divided amongst 45,000,000
of people, which works out at not more than l¼d. per head of the population? 1s that going to ruin families? There is nothing in it.

Mr. ARNOLD: I do not quite follow the hon. Member. Does he mean l¼d. per year?

Mr. SAMUEL: Per head, per day!

Mr. ARNOLD: If you come down to large families—father, mother, and seven and eight children—sit means paying 1s. Sugar Duty. If you go amongst the poor, you will find that 1s. a day is a very great matter.

Dr. MURRAY: I noticed the Minister of Health come in, and I was hoping that he was going to give of his expert knowledge to the Treasury, because this is really as much a health question as an economic question I agree with the hon. Gentleman who has spoken in saying that any tax upon sugar which makes it more difficult for the poor of the country to obtain sugar for themselves and for their children is bad, and helps to make the population a C 3 population, as the phrase is. I had hoped the Minister for Health would have stayed and taken part in this Debate. I see the Parliamentary Secretary here. I hope he is going to rise and speak against the Chancellor of the Exchequer on this occasion, and fell him that it is the considered opinion of the Minister of Health that any tax upon sugar is a tax upon the health of the rising generation. It used to be considered a crime to give sweets to children. Scientific opinion is more enlightened now. It is recognised on scientific authority that sugar is a great asset in the food and general health of the community. An hon. Gentleman opposite rose and suggested that this was a mere trifle in the budget of poor families. Personally, I am acquainted with some of these families, and I know a village where it is easy for people to get an extra ration of sugar. Why? Because the poor people with largo families are not able to buy the ration of sugar which the Government allows them on account of the price. In view of the general high level of prices in these times, relief of this sort would be a very great help to the poorer families in the community, who would be able to obtain more sugar, and it would also relieve the family budget in other directions.
Sugar enters into so many articles of food that it is really a direct tax upon the food of the country. I hope that the Chancellor of the Exchequer, whom I was very sorry to see appear so helpless this afternoon in the presence of the war profiteer, will be less helpless in this case. The country is restive in the knowledge that so many people have made money out of the War while most of the people have made sacrifices. The right hon. Gentleman to-day told us that he was absolutely helpless in the presence of this great problem of profiteering, which, I venture to say, attracts more attention in the country than any other problem at the present time. I do not believe anyone should have been allowed to make money directly out of the War. Instead of the Chancellor taxing the essential food elements of the people it would be a juster form of taxation to attend to the other problem. I have no intention of speaking further, but simply of giving my little testimony to the suggestion and contention that sugar is an essential food for the country, and especially for the rising generation, whoso development should not be hindered in any way. Let the right hon. Gentleman get his money by some ingenuity displayed towards the profiteer, by putting salt upon the tail of the profiteer, instead of getting it out of the food of the poorer portion of the population.

Mr. CHAMBERLAIN: I am sorry I cannot accept this Amendment. It is quite true that sugar is one of the necessaries of life. There was a time when the much criticised tariff reformers insisted upon the fact that tea and sugar were both a necessary of life, as much a necessity for the poor household as some other foods upon which it was deemed sacrilegious to lay hands. At that time hon. Gentlemen belonging to the party opposite drew a distinction between tea and sugar and these other things. Apparently they have been converted.

Captain BENN: But you tax both !

Mr. CHAMBERLAIN: A distinction, I say, was drawn between these and other articles by hon. Gentlemen opposite. Apparently they have now been converted to the views then expressed by some of us, and they do not now draw the distinction between the different articles they previously did. I should be very glad if I could see my way to reduce the Sugar Duty from its present time rate. I do not profess to look forward to the time in the
near future, or in any future with which I am likely to be associated, when it will be wise or sound policy to abolish the Sugar Duty altogether. I should be very glad if I could see my way to reduce it, or if I could have done so this year. I cannot, in view of the charges upon the State, in view of the. financial prospects, and the immense expenditure which we have before us; in view of the increased expenditure which is being pressed upon my colleagues and myself almost day by day, and the requests which come from hon. Gentlemen when the Budget is under discussion, who say, "Give us this or the other tax," while at the same time pressing for expenditure in other directions. If these hon. Gentlemen would set their faces against all increases of expenditure, and if they would do more than that, work to reduce them, then the realisation of our hopes might come. So long, however, as they are urging upon the Government that it should spend more on this, that, and the other direction, it really is not a counsel of practical possibility to ask us to abandon the Sugar Duty. The heavy charges with which the country is left, and the heavy charges (involved in the new policy which has been pressed forward by the Government, or rather pressed upon the Government by the House of Commons and the country, is not compatible with low taxation. To say that you are to have expenditure on all these great schemes which you are called upon to carry them out rapidly, and quickly, and at the same time to reduce or abolish altogether taxes of this kind, is really a matter we cannot accomplish whatever be our desire. Of this I have no doubt. I am sorry it is not possible to accept the Amendment.

8.0 p.m.

Captain BENN: I quite realise the great force of what the right hon. Gentleman has said, and, so far as I am concerned, I shall not be able to go into the Lobby against the repeal of the whole of this duty. I have no doubt that my hon. Friends for perfectly good reasons themselves intend to do so, and I do not question their good faith. The reason I cannot vote against the new Clause is because it is obviously right that the Chancellor of the Exchequer should have the right to balance his budgets—that is to say, decide how much is to be taken from one source and how much from another, how much from indirect and how much from direct taxation. But it is proper for us on a
new Clause of this kind to make what reference we wish to the judgment the Chancellor has exercised, in deciding how much of his taxes shall fall upon the poor people and how much upon the rich people. He made a point, which I am afraid I did not follow closely, about something which the great late Liberal Government did with sugar and tea. He said we made a distinction between tea and sugar. One recalls the fact that the Liberal Government reduced the taxes, both on tea and sugar, so that to that extent they did show their desire to reduce the cost of living by taking off part of the taxes on tea and sugar. Our complaint against the Chancellor of the Exchequer is that he has not sufficiently considered the position of the poor families, people with a number of children, who have a hard job to make up their family budget. As my hon. Friend has pointed out in his forcible speech, this duty is really a poll tax which is not distributed according to the ability to bear

it, but according to the number of heads in the family, and that is the worst possible form of taxation, because it penalises the very people who are doing most in the direction of national reconstruction. Our complaint against the right hon. Gentleman is that he has left the duty on sugar multiplied by twelve times to the pre-war period which leaves it altogether a war tax in times of peace, while there arc other sources of revenue from which he can get his money. The point of my hon. Friend's proposal seems a really good one, and the Chancellor of the Exchequer does not appear to have realised in distributing the fiscal burdens of the country the urgent needs of the poor.

Question put.
That the Clause be read a second time.

The Committee divided: Ayes, 46; Noes, 178.

Division No. 71.]
AYES.
[8.1 p.m.


Bramsden, Sir T.
Guest, J. (Hemsworth, York)
Short, A. (Wednesbury)


Briant, F.
Harbison, T. J. S.
Sitch, C. H.


Bromfield, W.
Hayday, A.
Smith, W. (Wellingborough)


Cairns, John
Hayward, Major Evan
Swan, J. E. C.


Carter, W. (Mansfield)
Holmes, J. S.
Thomas, Brig.-Gen. Sir O. (Anglesey)


Casey, T. W.
Kenworthy, Lieut.-Commander
Tootill, Robert


Davies, Alfred (Clitheroe)
Kenyon, Barnet
Wignall, James


Davison, J. E. (Smethwick)
Lunn, William
Williams, A. (Consett, Durham)


Devlin, Joseph
Murray, Dr. D. (Western Isles)
Williams, J. (Gower, Glam.)


Entwistie, Major C. F.
Newbould, A. E.
Wilson, W. T. (Westhoughton)


Galbraith, Samuel
Rattan, peter Wilson
Wood, Major Mackenzie (Aberdeen, C.)


Glanville, Harold James
Richardson, R. (Houghton)



Graham, W. (Edinburgh)
Roberts, F. O. (W. Bromwich)
TELLERS FOR THE AYES.—Mr.


Griffiths, T. (Pontypool)
Sexton, James
Hogge and Mr. Fred Hall


Grundy, T. W.
Shaw, Tom (Preston)



NOES.


Addison, Rt. Hon. Dr. Christopher
Campbell, J. G. D.
Forestier-Walker, L.


Agg-Gardner, Sir James Tynte
Carter, R. A. D. (Manchester)
Foxcrott, Captain C.


Ainsworth, Captain C.
Chamberlain, Rt. Hon. J. A. (Birm., W.)
Fraser, Major Sir Keith


Archdale, Edward M.
Chamberlain, N. (Birm., Ladywood)
Gardiner, J. (Perth)


Archer-Shee, Lieut.-Colonel Martin
Cheyne, Sir William Watson
Gilbert, James Daniel


Astbury, Lieut.-Com. F. W.
Clough, R.
Gilmour, Lieut.-Colonel John


Astor, Major Hon. Waldorf
Compton-Rickett, Rt. Hon. Sir J.
Green, J. F. (Leicester)


Austin, Sir H.
Cope, Major W. (Glamorgan)
Gretton, Colonel John


Baird, John Lawrence
Cory, Sir Clifford John (St. Ives)
Griggs, Sir Peter


Baldwin, Stanley
Cory, Sir James Herbert (Cardiff)
Gritten, W. G. Howard


Balfour, George (Hampstead)
Courthope, Major George Loyd
Hailwood, A.


Balfour, Sir Robert (Partick)
Cowan, D. M. (Scottish University)
Hancock, John George


Barnett, Captain Richard W
Craig, Captain Charles C. (Antrim)
Harmsworth, Cecil B. (Luton, Beds.)


Barnston, Major Harry
Craig, Col. Sir James (Down, Mid.)
Haslam, Lewis


Barrand, A. R.
Craik, Rt. Hon. Sir Henry
Henderson, Major V. L


Barton, R. C. (Wicklow, W.)
Davies, Alfred Thomas (Lincoln)
Henry, Denis S. (Londonderry, S.)


Beckett, Hon. Gervase
Davies, T. (Cirencester)
Hewart, Rt. Hon. Sir Gordon


Bell, Lieut.-Col. W. C. H. (Devizes)
Dawes, J. A.
Hohler, Gerald Fitzroy


Blades, Sir George R.
Dean, Com. P. T.
Hope, Harry (Stirling)


Blair, Major Reginald
Doyle, N. Grattan
Hope, James Fitzalan (Sheffield)


Blake, Sir Francis Douglas
Du Pre, Colonel W. B.
Hope, John Deans (Berwick)


Boles, Lieut.-Colonel D. F.
Edgar, Clifford
Hopkins, J. W. W.


Breese, Major C. E
Edge, Captain William
Hopkinson, Austin (Mossley)


Brings, Harold
Edwards, Major j. (Aberavon)
Horne, Edgar (Guildford)


Brings, Harold
Eyres-Monsell, Commander
Howard, Major S. G


Brotherton, Col. Sir E. A
Falcon, Captain M.
Hughes, Spencer Leigh


Brown, Captain D. C. (Hexham)
Farquharson, Major A. C
Hurd, P. A.


Bull, Rt. Hon. Sir William James
Fell, Sir Arthur
Inskip, T. W. H.


Jephcott, A. R.
Mitchell, William Lane-
Stanley, Colonel Hon. G. F. (Presto.:)


Jesson, C.
Mond, Rt. Han. Sir Alfred Moritz
Steel, Major S, Strang


Jodrell, N. P.
Moreing, Captain Algernon H.
Stephenson, Colonel H. K.


Johnson, L. S.
Mount, William Arthur
Strauss, Edward Anthony


Johnstone, J.
Murray, William (Dumfries)
Sugden, W. H.


Jones, Sir Edgar R. (Merthyr Tydvil)
Nail, Major Joseph
Sutherland, Sir William


Jones, G. W. H. (Stoke Newington)
Neal, Arthur
Terrell, Capt. R. (Henley, Oxfard)


Jones, J. Towyn (Carmarthen)
Nield, Sir Herbert
Thomas-Stanford, Charles


Jones, Win. Kennedy (Hornsey)
O'Neill, Capt. Hon. Robert W. H.
Waddington, R.


Joynson-Hicks, William
Pearce, Sir William
Wallace, J.


Kellaway, Frederick George
Perkins, Walter Frank
Walton, Sir Joseph (Barnsley)


King, Commander Douglas
Pretyman, Rt. Hon. Ernest G.
Ward, Colonel L. (Kingston-upon-Hill)


Knights, Capt. H.
Pulley, Charles Thornton
Wardie, George J.


Lane-Fox, Major G. R.
Rae, H. Norman
Watson, Captain John Bertrand


Law, A. J. (Rochdale)
Ramsden, G. T.
Weston, Colonel John W.


Lewis, T. A. (Pontypridd, Clam.)
Ratcliffe, Henry Butler
White, Col. G. D. (Southport)


Lister. Sir R. Ashton
Rawlinson, John Frederick Peel
Whitla, Sir William


Lloyd, George Butler
Richardson, Alex. (Gravesend)
Williams, Lt.-Com. C. (Tavistock)


Locker-Lampson G. (Wood Green)
Robinson, S. (Brecon and Radnor)
Williams, Col. Sir R. (Dorset, W.)


Locker-Lampson, Com. O. (Hunt'don)
Robinson, T. (Stretford, Lanes.)
Willoughby, Lt.-Col. Hon. Claud


Long, Rt. Hon. Walter
Rodger, A. K.
Wilson, Colonel Leslie (Reading)


Lorden, John William
Rowlands James
Wilson, Col. M. (Richmond, Yorks.)


Lort-Williams, J.
Samuel, A. M. (Farnham, Surrey)
Wilson-Fox, Henry


Lowther, Major c. (Cumberland, N)
Sanders, Colonel Robert Arthur
Wolmer, Viscount


M'Curdy, Charles Albert
Seager, Sir William
Woolcock, W. J. U-


Mackinder, Halford J.
Shaw, Hon. A. (Kilmarnock)
Worsfold, T. Cato


M'Laren, R. (Lanark, N.)
Shaw, Captain W. T. (Forfar)
Worthington-Evans, Rt. Hon. Sir L.


McNeill, Ronald (Canterbury)
Shortt, Rt. Hon. E. (N'castle-on-T., W.)
Yeo, Sir Alfred William


Macquisten, F. A.
Smith, Harold (Warrington)
Young, Sir F. W. (Swindon)


Maddocks, Henry
Smithers, Alfred W.



Maitland, Sir A. D. Steel-
Sprot, Col. Sir Alexander
TELLERS FOR THE NOES.—Lord E.


Martin, A. E.
Stanier, Captain Sir Beville
Talbot and Mr. Dudley Ward


Meysey-Thompson, Lt.-Col. E. C.

NEW CLAUSE.—(Extension of Relief in Respect of Children.)

Sub-sections (1) and (2) of Section twelve of the Income Tax Act, 1918 (which gives relief from income Tax in respect to children under the age of sixteen years), shall be extended to include a child over the age of sixteen years who is a lull-time scholar in any school or university within the United Kingdom recognised as such by the Board of Education.— [Mr. W. Graham.]

Brought up, and read the first time.

Mr. W. GRAHAM: I beg to move,
That the Clause be read a second time.
I am quite sure that this Clause will commend itself to the sympathetic consideration of a very large number of the members of this Committee. At the present moment we are on the eve in this country of paying largely increased Grants to the universities and the large secondary and other schools in order to secure the best and highest education, more particularly for the children of the working classes, as well as for the children of all sections of the community. It would be singularly unfortunate, and certainly quite impossible, to reconcile the policy that we should be embarking upon increased expenditure for the provision of education for these children and at the same time continuing a system of taxation under the Income Tax which would make it impossible for quite a considerable proportion of them to take advantage of the education so provided. It is very
often argued that there is little reality in. new Clauses or in Amendments or arguments of this kind, and that if there is any real desire on the part of the children of the workers to obtain the highest education in this country at the moment, there is no real obstacle to their doing so.
I think when one starts to examine as some of us have had occasion to do in the past the circumstances of many families, we find that whilst taxation does not exclude one or two members of that family from participating in the highest branch of education, it often has the effect of excluding other members of the family who are quite as well qualified to take ad-vantage of the training provided. That must represent, and 1 think does represent, a very real loss to the State from year to year. The only possible line of reply which I think can be offered by the right hon. Gentleman opposite is that this involves a question which is really to be settled by the Royal Commission on the Income Tax. I have no desire to anticipate the findings of that Royal Commission, or to indicate in any way the evidence which has been accumulated up to this point as the result of its investigations, but there can be no doubt in the mind of any hon. Members that there must be a recommendation to make the course of education as free and easy as possible from the point of view of taxation on the homes in this country. This is one of the cases
in which we can with perfect safety anticipate the findings or the recommendations -of that Commission.
In the second place, the new Clause we propose will have a real and immediate advantage. As I have indicated, we are embarking upon greatly increased expenditure upon universites, and we are doing so largely because of the consideration that higher education for the workers and professional classes is essential to a sound and healthy reconstruction. We argue this new Clause very strongly on these grounds, and we suggest in all fairness to the right hon. Gentleman that he will get an immediate gain, whether from the point of view of scientific training or other experience in industry and commerce in this country, such as will fully justify the concession we are asking for now. In point of fact, I believe the right hon. Gentleman's experience of the new policy we seek to advocate will be that it achieves a Teal gain, even on a purely material basis, as a result of the adoption of this Clause. I think it quite unnecessary to weary the Committee with arguments which must be familiar to all Members, which, I think, will not admit of an answer, whether we have taxation or education in mind, and I, therefore, press this new Clause upon the sympathetic consideration of the Chancellor of the Exchequer.

Mr. ADAMSON: I desire to support the Clause now before the Committee, and to bespeak for it the careful consideration of the hon. Gentleman who represents the Chancellor of the Exchequer for the moment. My hon. Friend who has just moved the Clause has pointed out the great difficulty that stands in the way of people with moderate incomes from the educational point of view unless the relief which we seek in the terms of this Clause is granted. I should like to remind the Financial Secretary to the Treasury that the lowering of the Income Tax limit from £160 to £130, with the increase that has taken place simultaneously in the cost of living, makes this a very serious question for persons with moderate incomes. Many reasons can be adduced for urging the favourable consideration of this proposal, but as I understand the Chancellor of the Exchequer himself looks upon it with a rather kindly eye, I do not think it would be wise on my part to take up more of the time of the Committee.

Mr. COWAN: I wish to support the case put forward by the two last speakers. I have on the Paper further down an Amendment which is in no way antagonistic to this new Clause, and, in fact, it was put down rather as a saving Clause. I certainly shall not press it in opposition to the one now before the Committee. We are all agreed that the great task of reconstruction must be based on a thoroughly sound system of education. That is a doctrine to which lip-service is more often given than real service. It has been emphasised by practically every Member of this House, from the Prime Minister downwards, in one way or another. There are several considerations to be borne in mind in regard to this matter. One of the most important is a lesson which we draw from the War. There were: many sacrifices made during the War, but none greater than those made by young men who had qualified themselves by superior education to become officers in the Army, and then, by losing their lives, not only robbed their homes of their presence, but took away also a promise of the repayment of the great expenditure incurred on their education. This is a matter for the State itself. If we are to have that new earth of which we are so often told, we must do something to make the path of higher education as easy as possible. Within the last year the Government have done much to afford increased facilities for higher education, and I hope, therefore, that this Clause will be accepted in some form or other, so as to carry out efficiently what I am sure is the intention of Parliament. Some drafting Amendments will be necessary, because, for instance, the Clause speaks of a school or university approved by the Board of Education, whereas the House knows that the "Board of Education has no jurisdiction in Scotland or in Ireland.

Mr. BALDWIN: The subject of this Amendment is one which has been raised, if my recollection serves me right, both last year and the year before. The Chancellor of the Exchequer at that time was unable to accept the Clause, his view being—and it was a view endorsed by a majority of the House—that so long as the War proceeded the time was not yet ripe for a step in this direction. But the War is now ended. I find myself in sympathy with everything which has been said on this Amendment, but I do not propose to accept the Clause as it stands, nor do I
propose to accept another Clause on the same subject further down on the Paper. The Clause now under discussion is a little narrow in its interpretation, and we cannot allow it to stand. We have given careful consideration to this matter, and I shall be quite willing to have a Clause drafted before the Report stage which will give what is desired in respect of children up to the age of eighteen years, provided that the education is full time. I think that covers the point. Full-time education is what we desire, and by drafting a Clause on these lines I think we shall meet objections which have been raised, and enlist sympathy in all quarters of the House. I hope, therefore, the Clause which we propose will meet with the support of those who are bringing forward the present Clause.

Mr. ARNOLD: I am glad to hear that the Government at last is going to make some concession, however small, to this side of the House. I have a new Clause on the Paper on the same subject, and I appreciate the fact that the Chancellor of the Exchequer is willing to put down a Clause of his own, giving this concession up to the age of eighteen years. I really think there is a very strong case to be made out for going further, more particularly as in the last few weeks evidence has been given before the Royal Commission on Income Tax, according to the Press, from the Board of Education itself, which recommended that relief in respect of school attendance should be from the age of fourteen onwards so as to increase with the age of the students. The scale they recommended was from fourteen to sixteen, £50; from sixteen to eighteen, £75; from eighteen to twenty-one, £100; and from twenty-one to twenty-five, £125 per annum. If the Chancellor of the Exchequer merely puts down a new Clause up to the age of eighteen, then as compared with the views of his colleagues at the Board of Education, he is getting off very cheaply indeed. In these circumstances, I would ask that he should reconsider the matter and see if he cannot go a little further. I ask that particularly because if this new Clause is put in now up to the age of eighteen, it will be very difficult to extract any further concessions probably until some years more have elapsed. It is interesting to know that the hon. Gentleman and the Chancellor of the Exchequer are on this occasion going in advance of the findings of the Royal
Commission. But I am afraid they are-doing that because they think they will get off rather more cheaply. As a general rule when any reform is urged in regard to Income Tax they say, "We cannot do anything. We have set up a Committee and must wait to see what they have to say." The Income Tax Commission is a perfect godsend to them. When it does not suit them to do anything they say. "Wait till the Commission has reported. When they want to get off cheaply they go in advance of its findings. There is a very strong case to be made out for doing this in a more whole-hearted manner. If I had thought there was a chance of getting more I would have put my own Clause in a more complete form. However, as the Chancellor of the Exchequer will go thus far, I very much hope between now and Report the hon. Gentleman will persuade him to go rather further, because I am quite satisfied that any concession given in this way would pay the country well. Whatever loss of revenue there might be would be made good very soon by increased efficiency on the part of the students.

Mr. GRAHAM: I greatly appreciate the concession which has been offered by the hon. Gentleman, but I wish to press this point very strongly on his attention. In the case of the Scottish universities the entrance age is sixteen, and, as a rule, the students continue for three, four, or five years to the age of twenty or twenty-one—that is, assuming they start at the earliest possible moment. The effect of the restriction to the age of eighteen years would be to exclude from participation in this con-cession a very large number of the sons and daughters of the working classes at a period in the curriculum when the expenses were higher and the general pressure on the resources of the home was more severe than at the period the hon. Gentleman has in mind. I know h e desires to meet us. The concession is very valuable, and we appreciate it, but it ought to go beyond the age of eighteen.

Dr. DONALD MURRAY: I am afraid the hon. Gentleman will look upon us as a lot of Oliver Twists, and that our asking for more will not encourage him to make concessions. But really in order to make this concession of any value whatever, especially in Scotland, it would be necessary to extend it. The young men and women in the Highlands go to the universities at, perhaps, a later age than
they do in the Lowlands. The further you -are from a university the later the young men and women are in going to it, owing to various local circumstances. I would extend the concession to the whole university curriculum. The people who send their boys and girls to universities are those who have been most hardly hit in this War, especially in Scotland. The higher-paid working men, the smaller tradesmen, the poorly-paid professional men, people whose incomes really have not much increased during the War, will be most hardly hit, and unless some wider concession of this sort is made higher education in Scotland will suffer very largely in the years to come. Even if you lose a little revenue, in the interests of higher education and of many of these men who have made very serious sacrifices in order to get higher education for their children, 1 hope the hon. Gentleman and his advisers will take a broader view and will, if possible, extend this relief until the university curriculum is concluded.

Mr. ACLAND: There is no doubt this is really a valuable concession. It is a great help, and it will be appreciated in tens of thousands of families. One of the things that has almost been a consolation in the War is to know that from one end of the country to the other the secondary schools supported by local education authorities have never been so full. The classes who use them, to some extent, apart from profiteering or anything of that kind, have been better off owing to working overtime and that sort of thing, and they have had the good sense to send their children to secondary schools more than they did before and to get the best education avaliable for them. But there has always been this tendency in our secondary education hitherto, owing to the family not being able to dispense with the earning power of the children, to withdraw them half way through the full course instead of keeping them on till the end with a chance of getting a scholarship or even going to a university. So far as it is within the power of the Chancellor of the Exchequer, he has removed that difficulty. There will, at any rate, not be any cutting short of this concession at the age of sixteen, and it will undoubtedly be easier in many cases to keep the girl or boy to the end of the secondary school course, and even in some cases— in Scotland, where they go to the uni-
versity early—to start on a university career. Therefore 1 recognise that a really valuable concession has been given, particularly in a year in which any sort of concession with regard to the incidence of taxation has been rather difficult to make. If it is possible, as I hope it may be, to go further, I want to suggest what I think is the best way in which further progress can be made. A big scheme of scholarships both in secondary schools and in universities is overdue. It was recommended years ago by the Consultative Committee of the Board of Education. Their report was then referred to two other Committees set up by the Board of Education, the Committee on the place of modern languages in our education and the Committee on the place of science in our education. Those two Committees confirmed the finding of the Consultative Committee with regard to the urgent and pressing need for big scholarship schemes. Further Committees have been appointed since then, and, although, no doubt, there has been correspondence between the Education Department and the Treasury, no really big scholarship scheme for our higher secondary schools and universities has yet been established, and it is more pressing than it has been for years, more pressing than practically any other development in education. Until something of that kind can be done, it seems to me that it might be possible for the Treasury to follow the line that I and my Friends have indicated in our Clause, and make the concession above eighteen apply only to cases where fees are being paid for education. [HON. MEMBERS: "No !"] Then, when the big scheme of scholarships comes along and automatically establishes a very large increase in the number of people who do not pay fees—that is what we all want, and what is absolutely necessary—the charge on the Exchequer in the actual relaxation in Income Tax would automatically decrease, because, instead of the smaller relaxation from Income Tax, there would be a much larger relaxation in cancelling the fee and replacing it by a scholarship. I welcome the concession made, and I should like it to act automatically up to twenty-one with regard to everybody. I have only tried to indicate a way in which, if the Chancellor of the Exchequer wanted to be certain when the long overdue scholarship scheme came in, this concession would cease to cost him so much and further allowances could be made to encourage education. I do not
wish anything I say to detract from my full recognition of the value of the concession now made.

Mr. JOHN STONE: There is an Amendment on the Paper in the name of the hon. Member for the Scottish Universities (Mr. Cowan) and my own name providing for this concession being extended to eighteen years in the case of children attending a full secondary school, and to twenty-one years in the case of children or young persons attending a university. I come from a country which has the cheapest education system in the world, and only my natural modesty forbids my saying that it is the best system. If the idea of the right hon. Gentleman (Mr. Acland) with regard to the concession being limited to those who pay fees, was insisted upon, it would rule out a great many brilliant boys and girls who go to our Scottish universities. It has been my good fortune to have spent the most of my life in touch with villages, and I have come into close contact with many intelligent working men and many humble homes. The great idea of these working people is that their children should have a greater opportunity in life than their fathers and mothers had. Under the old system of Scottish education, when the old country schoolmaster got a bright, intelligent lad he pushed him forward, and' induced his parents to make great sacrifices in order that he might go to the university. I am not so sure that that spirit is so pronounced to-day in Scotland as in times past, but undoubtedly among our intelligent working people there is a desire that their children should have the full benefits of education, and that the opportunities of going to the universities should be afforded to them. This is done in numerous ways by bursaries and other scholarships, and arrangements for the payment of fees, that enabled many of the children of the working classes to go on to a full university course.
I should like the Government in the new Clause not to put any limitation upon young people going forward to the university, but to raise the limit to twenty-one years for that purpose. Apart altogether from the money consideration the fact that the Government have lent their sympathetic ear to this real policy of reconstruction and this really good purpose will be greatly appreciated by the great mass of people both in Scotland and in England. In my country, where education is so cheap and opportunities are so
many, and where the facilities are more perfect than in any other part of the United Kingdom for children proceeding from the elementary school to the secondary school and the university, it may be said that it should not be so very difficult for people there to have their children fully educated. But the taking of these young people from the age of fourteen to twenty-one for their educational course necessitates the sacrifice of their wages. Many of our people in Scotland have great difficulty sometimes to make ends meet and bring up their families respectably, and when on the top of the comparatively small fees they send their children to the universities up to the age of twenty-one, it is only done under the sense of sacrifice. If the concession now promised by the Government encourages these people to continue their children at the secondary schools or the university for the whole course it will be an enormous advantage to the people and to the nation, and it will be building up an asset that cannot be counted in pounds, shillings and pence.

Mr. ADAMSON: As one of those who for several years has been trying to get the Government to give concessions on this and similar points, I want to express my thanks to the hon. Gentleman for his valuable concession. I am delighted to have the support of so many other hon. Members. At the same time I recognise the difficulty in which the Financial Secretary is placed in extending the concession beyond the period he has named, in the absence of the Chancellor of the Exchequer. I would suggest that he should discuss with the Chancellor of the Exchequer between now and the Report stage, the views that have been expressed in this Debate, and I hope that he will rule out any consideration of the idea as to the payment of fees that was expressed by the right hon. Gentleman (Mr. Acland). Whatever concession is to be given should apply all round. There should be no question of payment or non-payment of fees. I think that if the Financial Secretary would approach the Chancellor for consideration of this matter between now and the Report stage in terms of this discussion, we could very well accept the suggestion which he has put forward.

Major McKENZIE WOOD: I deeply appreciate the concession which has been made, but it seems to me quite illogical. In Scotland, as far as my informal ion goes,
the average at which pupils go to the university is eighteen. The result is that the selection of eighteen as the dividing line means that no concession is to be given to parents who send their children to a university. We in Scotland have always given the greatest attention to the university and have always done all we can to encourage parents to send children to a university. At present, in consequence of what has happened as a result of the War, it is more difficult than ever for parents to send children to universities. Prices have gone up, lodgings in the towns have gone up, and anything in the way of a concession to these people would be of the greatest importance. Is there any reason why a parent should get a concession in respect of a child who is at a secondary school and be denied that concession when the child goes a little further to a university and when expenses on the parents are even heavier than they have been before? There is no logic in the line that the Government suggest should be drawn in this matter. It has been suggested that there might be some arrangement giving concessions where fees are paid. I must look at this question mainly from the point of view of Scotland, and there are whole counties in Scotland where there is practically no child who pays fees at all, and where parents do not pay fees for any child at any school, and a concession of that kind would not touch them at all. By the suggestion of the Government you are going to give a concession which will be valuable, but you are going to prevent that concession going far enough, to a point where it would be more valuable and more necessary. I hope that the Government, having gone thus far, will see that there is no possibility of staying there, but that they must increase the concession so that it will cover the whole university curriculum.

Mr. R. RICHARDSON: I urge the Government to accept the suggestion of my hon. Friend and increase the age from eighteen to twenty. Under the Act of Parliament which was recently placed on the Statute Book we are about to develop our system of education, and we are anxious that the best pupils we can get at our secondary schools shall come into the teaching profession. Those who are engaged in the administrative work of education want to do far more than has ever been done before in our elementary schools. Unfortunately, up to the present we have had to be content with people who
could not afford a university education for the teaching of young children. That ought to become a thing of the past. It should be just as easy to teach a child eleven years of age in an elementary school the rudiments of certain subjects as it is to teach a child of 11 years of age in a secondary school. The only thing we are short of is the people to begin that work. Therefore, we ask to be given an opportunity of having the very best brains in our schools recruited for the teaching profession, and to assist the parents, so that they may get the chance of having this done. Many times it has been my painful experience to see children of the brightest intellects compelled to give up their training as teachers for the lack of means, and I do hope that the Government will accede to the request. It will not cost very much, and, indeed, the cost compared with the amount which the nation will receive in, benefit will be very small indeed.

Mr. BALDWIN: I should have risen some time ago had it not been that I recognise that a large number of Members, especially from Scotland, wish to say something on this Clause. Of course, I gladly give my right hon. Friend the Member for West Fife the assurance for which he asks. I had intended to give it to him. In discussing this matter with the Chancellor, I will let him know the very strong expression of opinion which has been put forward. I think that the offer which I have made is a very fair one, and I will only safeguard myself by saying that the right hon. Gentleman must not understand that a promise to consider the question means that the Chancellor is committed in any way to go beyond what I have said.

Mr. ADAMSON: I recognise fully that the promise which has been made by the Financial Secretary in no way involves the Chancellor in any definite pledge. What I have suggested is that the question should be further considered between this and the Report stage, and on that understanding I beg to withdraw the Clause.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE. — (Assessment of Income of Wage Earners.)

Notwithstanding anything in the Finance (No. 2) Act, 1915, or the Income Tax Act, 1918, weekly wage earners as defined in these Acts shall be assessed upon their wages for the
whole year, and the tax shall be payable by four equal quarterly instalments in the year.—[Mr. Adamson.]

Brought up, and read the first time.

Mr. ADAMSON: I beg to move,
That the Clause be read a second time.
No question has been a source of greater dissatisfaction in recent months among the working classes than the question of Income Tax. I am not entitled on the consideration of this Clause to deal generally with the question of Income Tax, but am confined to the Clause which I am moving to have read a second time. The cause of continued dissatisfaction to which I have referred is in the main the question of the payment o any Income Tax at all on amounts under £250 a year. There is at the same time a considerable amount of dissatisfaction with regard to the particular matter dealt with by this Clause, namely, the assessing of the workmen's wage for Income Tax on a quarterly basis instead of on a yearly basis. I know the reply which in all probability I shall get from the Financial Secretary. It will be that this is done for the convenience of the very parties that the new Clause deals with. It may be a matter of convenience, but it is also a matter that very frequently causes serious trouble and loss. You may have a workman earning sufficient money to bring him within the payment of Income Tax during the first quarter of the year or the first and second quarter of the year, but suddenly something goes wrong with his employment; here mains idle for a week or two or the nature of his employment changes, and his wages arc considerably reduced, and before the end of the year it is found that if his wages had been assessed on a yearly basis he would not have been liable to pay Income Tax at all. Again I am a wave that the Financial Secretary will reply, "But he is in a position to recover any money that he has paid on the quarterly assessment, should his yearly earnings not make him liable to payment of Income Tax." That is perfectly true, but if that is done a considerable amount of trouble is placed upon the workman. He has to undertake a considerable amount of correspondence with the assessor of Income Tax, or, as an hon. Friend reminds me, he may have to visit the assessor before he can get his money returned. In many cases rather than undertake the worry working men would be prepared to allow the money to remain
in the hands of the assessor. In other cases, instead of undertaking the worry themselves, they pass it on to the shoulders of officials of their particular trade unions. I can assure the Committee that those individuals have sufficient trouble without this extra one being heaped upon them. We are very anxious that some arrangement should be made whereby the worker will be placed on exactly the same footing as other sections of our people. I was going to suggest again—I do not know whether it will meet with the approval of the Financial Secretary—that this is a matter which he might seriously consider with the Chancellor of the Exchequer between now and the Report stage. It may be possible that neither lie nor the Chancellor of Exchequer is in a position to go into all the difficulties involved in my proposal, and I make him this suggestion with a view to full consideration being given to the matter. If he is prepared to give it such consideration, and to allow either my Friends or myself, who have some knowledge of the difficulties involved, the opportunity of discussing the matter with himself or his officials, I shall be satisfied and not press this Motion tonight.

9.0 p.m.

Mr. BALDWIN: The suggestion put forward by my right hon. Friend is exactly what was in my own mind. This is a very difficult and technical subject, but one in which I do not think we can make any substantial progress by discussing it now. My one desire is to make this collection as easy both for the Inland Revenue and for the Income Tax payer as it can be made.
When this tax was first brought down to its present level, if my memory serves me, Mr. McKenna had a conference with some of the right hon. Gentleman's Friends, and the system now in vogue is the one he finally adopted. I shall be only too pleased to meet my right hon. Friend and two or three of his Friends —I think the fewer the better—in conjunction with the officials of the Inland Revenue, and to go thoroughly into the question with a view of seeing whether anything can be devised before the Report stage which would meet his case and at the same time protect our interests. I make him that offer with the hope that we may be able to meet some of the difficulties. I quite recognise that the difficulties to which he alludes are real,
and I am certain that that is the best method of procedure if we wish to reach a successful solution.

Mr. SEXTON: I want to go a bit further than my right hon. Friend. I want to ask the Financial Secretary to take into consideration the case of the man who is not in a sense a weekly wage earner. As I said before, I am pleading for the bottom dog, the man who is a "casual" the man who works for half a dozen different employers, who is so much occupied looking for work, and who—it is no reflection on the man—is so illiterate that when he is suddenly faced with a demand from the Inland Revenue in the shape of a document that would puzzle even me to understand, that would tax the ingenuity of a Philadelphian lawyer sometimes to understand, he lets the thing go by default. I am not trying to excuse any man for seeking to escape his share of the burden of taxation. We all should bear our proportion. Let me put the case to the hon. Gentleman. Take the question of the casual labourer. I am speaking of men whom I know in Liverpool. The man in that position may receive slightly over £3 per week, and that to-day represents a purchasing power of something like 30s. I know that with the conditions laid down as to wives and children many of those men could get exemption, but there are a number of men who have no wives and no children, but have aged parents, or others dependent upon them. These men are being told and expected to put in all they can in order to increase production. But if overtime is going to be taxed, that does not encourage increased production. Men are not inclined under those circumstances to work overtime. I state that to be the fact respecting the men whom I have the honour to represent. Notices are now being served on these men for assessment for Income Tax. A casual labourer is suddenly asked for Income Tax, and has got nothing to pay it with. He is asked to pay arrears of Income Tax on an income which he has not got and never had. Those men do not go to the trade union secretary, like those referred to by my right hon. Friend. They do not go anywhere, but get that irritable and disgusted at this imposition that they throw the form on one side and let the matter go by default. At the end of the quarter a man in that position is presented suddenly with a demand from the Inland Revenue for Income Tax on an income he never got.
Assessment is made by the Inland Revenue people on a return sent in by the employer.
As far as Liverpool is concerned, we have machinery whereby the assessment could be got. It is the only port in the United Kingdom where there is a clearing house for collecting wages. That machinery was originally created under the Board of Trade to enable a man to get his wages from all his employers, in order to save him from having to go round to a number of them. The machinery has been sought to be used for criminal cases and for the school board, and now, when it is sought to use it for Income Tax purposes, the men naturally object. I hope the right hon. Gentleman will consider the case of the casual labourer as a distinct case from the man who earns and gets a steady weekly wage. It is an irritating element and one which is going to give more trouble. I suggest to the hon. Gentleman that, for the little they get out of it, and considering the irritation it arouses, the game is not worth the candle. and I would request of him to consider the matter in conjunction with my right hon. Friend, and I shall be only too pleased to give him any assistance I can in the matter.

Mr. RAWLINSON: The hon. Member who has just spoken has put his case very clearly, but surely it is a strong case against the Motion before the House and in favour of making the demand not every three months but every twelve months.

Mr. SEXTON: My case is it should not be made at all.

Mr. RAWLINSON: My hon. Friend said he was the last person to prevent anybody paying Income Tax due by law. We must assume that a man getting £3 a week is liable to Income Tax, and surely it would be far more for the man's convenience that there should be a collection at frequent intervals, even weekly, rather than longer.

Mr. SEXTON: The man to whom I was referring is really exempt, but he is more or less illiterate and does not take advantage of the form, but lets it go by default although he is not really liable to pay the tax.

Mr. RAWLINSON: That is a somewhat different point. Surely this Amendment will not help a man in that positron? The man who is not really bound to pay should
not have to pay, and, equally, the man who ought to pay should pay. There is not the slightest doubt that a large number who ought to pay are not paying, and I am sure we are all anxious that that should be stopped. Every honest man would wish that those who are not bound to pay should be helped in every way to get out of paying. There are not only trade union officials to help such men, but a large number willing to help. There are philanthropic agencies and Income Tax agencies which, for a very small percentage, would act for the people in the situation described by the hon. Member. If, however, the man, when he gets the Assessment Paper, will not go to the trade union official or anybody else, but gets irritable, that is an exceptional case we cannot deal with by legislation and this Amendment would not help such a man. The whole of the arguments of the hon. Member point to the fact that there should be a collection at much shorter intervals rather than longer. The present system is too long rather than too short. For these reasons I submit that this is an Amendment which ought not to be carried. It would not help those who ought not to pay, and it would not compel those to pay who might to do so.

Mr. ADAMSON: I am quite satisfied with the undertaking given by the Financial Secretary, and I am certain that if there is any particular point in connection with the speech of my hon. Friend behind me, the Financial Secretary will be willing to consider it. I would, in the circumstances, ask leave to withdraw my Amendment.

Motion and Clause, by leave, withdrawn.

The DEPUTY-CHAIRMAN (Sir E. Cornwall): The next Amendment in the name of the hon. Member for West Fife (Mr. Adamson)—[Lery on Capital] —needs a Resolution in Committee of Ways and Means, and is, therefore, not in order.

NEW CLAUSE.—(Income Tax on Married Persons.)

If either a husband or a wife who are living together claims to be separately assessed for the purposes of Income Tax, neither of them shall be liable to pay a larger sum in respect of Income Tax than they would be liable to pay if they were each unmarried.—[Mr. G. Locker-Lampson.]

Brought up, and read the first time.

Mr. LOCKER-LAMPSON: I beg to move
That the Clause be read a second time.
The object of the Clause is to remove, if possible, the present penalty tax on marriage. When I last had the honour of moving an Amendment on the Budget Resolution, the Chancellor dealt, if I may say so, with this whole question in a somewhat flippant spirit. I do not think he-would have dealt with it in a flippant way, supposing it had had an organised body behind it, like a great trade union, but unfortunately married people, as such, are not organised, and have not organised themselves into a great body, so far as I know, ever in history on any subject, and, therefore, I am afraid the Chancellor of the Exchequer, on that occasion at least, thought that he could afford to jest on the matter. But I hope to-night he will take this question very seriously, because there are a great many married people throughout the country who take a very serious view indeed of this penalty tax on marriage. In the last Debate on this question the Chancellor of the Exchequer really did not reply to any of the arguments on their merits, if I may say so with all respect. He did not really deal with the facts that were brought before him, but he brought forward three reasons against the proposal which I venture to put forward in this Clause. One reason was that a Royal Commission is sitting at the moment on this question, another reason was that he said it would be very difficult to disentangle the question of a marriage tax from the vest of the Income Tax law, and the third reason he brought forward was that it would cost a great deal of money.
On the question of the Commission I would like to say one or two words. Only this morning there was published a large Blue Book containing the first instalment of the evidence given before the Royal Commission on Income Tax. It was published this morning just before, the Committee Debate on the Finance Bill. I happened to be passing the Government Publications Department in Abingdon Street. I had seen in the paper that this Blue Book had been published, and I went in and purchased a copy for 2s. I lent it to a friend, and on turning to this House I went to the Library before Question Time and asked them whether they had got a copy. They opened their book which records documents presented to Parliament and saw that they had got it down there as a document presented to Parliament, but they had not got it in the Library and could not show me a copy. I then went to the Vote Office, and they had
not got it there, but the gentleman in charge of the Vote Office said that although it was a document published at the expense of the taxpayers to be presented to Parliament an order had been given that that evidence was not to be used as a Command Paper to be laid before the House. I venture to say that that is really extraordinarily unfair. This is the second or third day in Committee on the Finance Bill, and, as a matter of fact, a great deal of evidence has reference to the tax on marriage, and this evidence has only just been published, but the House of Commons is not to have it. You can only get it by going to the Government Publication Department and paying 2s. for it. In fact, the Vote Office told me to-day before Questions that a special order had been given that it should not be laid before this House as a Command Paper.

Mr. CHAMBERLAIN: By whom?

Mr. LOCKER-LAMPSON: I cannot say.

Mr. CHAMBERLAIN: I hope the hon. Member will accept my word for it that this is the first I have heard about it. I imagine that the evidence before this Committee will be contained in a series of bulky volumes, and that somebody has thought it should not be treated as a Command Paper, and so circulated to every Member whether he wanted it or not.

Mr. LOCKER-LAMPSON: No, it would only be on request.

Mr. CHAMBERLAIN: I think not, but I will make inquiries. My recollection is that I have been told that a Command Paper has to be sent to every Member of the House. I believe a Command Paper goes automatically to every Member of the House; I believe that is the rule. This document will no doubt appear and be circulated to Members who desire it, but I hope hon. Members will not think that either I or anybody else has deliberately tried to prevent Members getting this volume.

Sir F. BANBURY: If the facts are as stated, it is a breach of the privileges of this House, that Parliamentary documents should be circulated to the public which are not circulated and are prevented from being circulated to this House.

Mr. CHAMBERLAIN: Nobody would forbid the circulation to this House. It may have been stated that it was not to
be circulated as a Command Paper automatically to every Member of the House, but the idea that anybody would forbid the House access to the Paper is, I am sure, mistaken.

Mr. LOCKER-LAMPSON: I do not suggest for one moment that the Chancellor of the Exchequer or any member of the Government has had anything to do with the withdrawal of this document from the House of Commons, but what I do say is that you have to pay 2s. for this Government publication. It is not in the Library, and it is not in the Vote Office, and no Member of Parliament has access to it unless he actually goes and pays for a copy in the Government Publications Department. Also I may say that this evidence which was published this morning is not at all up-to-date, and I should think it is unprecedented to publish evidence like this bit by bit. It only goes as far as the beginning of May, and, as a matter of fact, on the 4th June very important evidence on this marriage tax was given by Mrs. Hubback, the head of the National Union of Societies for Equal Citizenship, and it would have been extremely useful if that evidence, instead of not being printed at all in the Blue Book, had been published for the benefit of hon. Members. I am especially sorry that this document is not before the House, because there are pages of evidence given by Mrs. Ogilvie Gordon in favour of the new Clause which I am proposing to the House. Before leaving the subject of this Commission I should like to place this before my right hon. Friend, in the hope that he will, perhaps, be able to convey it to the chairman and members of that Commission. When Mrs. Ogilvie Gordon was being examined she was rather heckled by the members of the Commission in regard to how she proposed that the money should be found if this reform were adopted. I must say that it does not seem to me to be in the least the business of witnesses called before such a Commission to try and suggest a way for the Chancellor of the Exchequer to find the means of obtaining money, supposing there is a loss on any particular reform of the Income Tax law. Mrs. Ogilvie Gordon was heckled over and over again by the chairman and by members of the Commission. I hope that procedure will not be adopted in future in regard to witnesses who are examined.

Mr. W. GRAHAM: I am sorry to interrupt my hon. Friend, hut I was a member
of the Commission, and, in point of fact, the cross-examination of this witness was on statements made by the witness, and not by members of the Commission.

Mr. LOCKER-LAMPSON: I know what I am talking about, I read this evidence this morning. Mrs. Ogilvie Gordon was heckled over and over again by the chairman and other members of the Commission. My right hon. friend said that we ought not to adopt any alteration of the Income Tax law until the Commission had reported. Personally, I do not see, if I may venture to say so, that this is at all a sound doctrine. It is the business of this House to legislate, not to wait until a Royal Commission reports on any question. It is not the business of this House to wait to remedy an obvious injustice until a Commission has reported upon it. After all, it is not for an outside body to dictate to us on a question of principle; it is for the House of Commons to make up its mind on a great question of principle. If the House of Commons does not do that, but insists upon waiting until a Commission tells it its duty, we might just as well abdicate our rights as Members of Parliament. With regard to the right hon. Gentleman's argument about disentangling this question from the rest of the Income Tax law, the Government found no difficulty in disentangling the question of the wages of miners from the question of the nationalisation of mines. I suggest that if married people had been organised like the miners he would have found no difficulty in disentangling this question of a penalty tax on marriage. It has very little to do with the difficult machinery of the Income Tax law, and I believe it is perfectly easy to disentangle this question and accept this Clause without giving any more work to the officials of the Inland Revenue. In regard to his argument about the extra cost, that leaves me quite cold, because the more he proves that there is extra cost the greater he proves to be the injustice on married people at the present moment. Moreover, in the present state of the law, it is hitting the very poor, and not only the rich. Therefore, I suggest that if the right hon. Gentleman wants to get the money he should add it to the Super-tax and take away the penalty tax on marriage. I should like, if I may, also to suggest that he can find ways of saving money by doing what he can to diminish the present extravagance of a good many of the Government De-
partments. Anyway, I do not believe that the Estimates which we have heard are at all accurate; I believe they are greatly swelled and inflated. I believe that the loss from evasion could quite easily be avoided with proper machinery, such as is already used in the case of the Death Duties. The Death Duties are founded on quite a different principle, and I do not see why there should be a different principle for Death Duties from that which is applied in regard to this particular Income Tax. When a wife dies her income is treated as absolutely separate for the purpose of the duty, and the Exchequer gets its tax; but when she is living with her husband the income is treated as joint for the purposes of the Exchequer, and the Exchequer steps in and takes the tax. I maintain, and I do not believe it will be denied by the Chancellor of the Exchequer, that at the present moment there is a direct penalty tax on marriage, and that the Married Women's Property Act is every day being infringed by the Inland Revenue authorities. May I just give three short illustrations? As I say, they do not affect rich people, but comparatively poor-people. Take the case of a woman with an earned income of £78 and house property of, say, £40 a year. Take a man with an earned income of £120 and dividends amounting to £70 a year. That is a total income between those two persons of £308, or less than £6 a week; that is to say, less than a good many artisans get at the present moment. If they are unmarried the woman pays no tax at all, and the man pays an Income Tax of £10 10s. a year. But directly they marry there is a joint tax of £12 15s.; that is to say, a tax on marriage of £2 5s. Take the simpler case of a man who has a salary of £220 and a woman who has £180 in dividends; that is to say, a total income of £400. If they are unmarried the man would pay £11 5s. a year in Income Tax and the woman £9, or a total tax of £20 5s. Directly they marry they pay a tax of £35 8s. 9d., or a tax on marriage of £15 3s. 9d. Take the case of very much poorer people—that of a man who has £90 a year in wages, and a woman who has £90 in dividends. Before they are married neither of them pays any tax at all, as each of their income is under the limit; but directly they marry they have this joint income of £180, or £3 10s. a week, and they pay a tax on marriage of £5 5s. You do not treat anybody else like this,
but only people who marry. You do not treat two sisters living together like this, nor a father and a daughter, nor two brothers, nor an aunt and a niece, nor a mother and a son. They live together; they have all the advantages of a joint income, but you do not treat them like this. You do not treat like this a man and a woman who are living together unmarried, with all the advantages of a joint income; but directly that man and woman marry, directly they make up their minds to join in a legal bond, the State steps in and puts a penalty tax on that legal bond. I say that that is a monstrous system. The question of cost leaves me absolutely cold. That is a question for this House of Commons to decide. The other day— it has been quoted before, but I should like to quote it once more—the Financial Secretary to the Treasury, in a Debate in this House on this very subject, used these words:
I agree freely as an individual and as a married man that there is a great deal to be said for the coarse that has been presented tonight. It has always been an intolerable anomaly to feel that so far as taxation was concerned it would be cheaper to live with a, woman who was not your wife than with a woman who was. That is an intolerable anomaly.
Does the Chancellor of the Exchequer agree with his Financial Secretary?

Mr. CHAMBERLAIN: So far as it is cheaper.

Mr. LOCKER LAMPSON: I am glad to get that admission from the Chancellor of the Exchequer. I am only asking that the tax shall be taken off. The Income Tax authorities, every day of their life, are violating the rights of women and of the Married Women's Property Act. They are treating the incomes of married women as part of those of the husbands. The Chancellor of the Exchequer very courteously received a deputation the other day in the House, when he refused to admit this. He said there was no differentiation under Income Tax law between husband and wife. I can prove there was. In 1842, when Sir Robert Peel revised Income, Tax, married women had no rights whatsoever. Directly they married the whole of their rights were taken away from them, and went into the ownership of the husband. This was felt to be an intolerable injustice, and in 1882 the Married Women's Property Act was passed. I should like to read these few words from the Act:
Every woman who marries after the commencement of this Act shall be entitled to have and to hold as her separate property all real and personal property that shall belong to her at the time of marriage, or be acquired or devolved upon her after marriage.
This was the Act of 1882, and I say that that Act is just as much the Charter of the married women as was Magna Charta of the men. Last year the Government passed the Income Tax Act, and this Act came into operation, I believe, in April—only a few weeks ago. In that Act it says:
The profits of the married woman living with her husband shall be deemed to be the profits of the husband and shall be assessed in his name—not in her name or the name of her trustee.
this Act, therefore undermines the rights of women under the Married Women's Property Act It is a direct violation of the privileges that married women obtained under the Act. Under the present Income Tax law, no woman can get repayment of tax unless she makes a special appeal and goes through a good deal of difficult procedure. You do not treat the husband like this. The husband never has to appeal in order to get a repayment of tax that he has overpaid. It is only in the case of a married woman that a special appeal has to be made to the Inland Revenue authorities. I will say that even when she does appeal she does not often get repayment of the tax. Case after case can I bring before the Chancellor of the Exchequer where she does appeal and the repayment is made to the husband and not to her. I have a letter here from a surveyor of taxes, dated the 11th June, and addressed to a Mrs. Roscoe:
Dear Madam, —In reply to your letter of the 9th instant, I do not appear to have made it clear to you that a married woman is not entitled to claim any repayment of tax whatever. A claim of repayment in respect of a wife's income can only be nude by the husband and repayment must be made by law to him.
What I suggest to the Government is that the Income Tax law ought to be brought immediately into conformity with the Married Women's Property Act. It is not necessary for a Royal Commission to sit on the question. It is the duty of the House of Commons to decide upon it. In the second place, this penalty tax on marriage ought at once to be removed. You have no right to place a special tax upon this legal bond of marriage. You do not require a Commission to sit from now to the beginning of the next financial year to tell us we ought not to have a penalty tax on marriage.
The other day the Government were divided in this House on a question about the rights of women. They sent out urgent Whips—they rang up half the telephone exchanges in London to get their supporters here to back them up against the women. They were defeated badly, and I do hope that will be a blessing and a warning to the House. They have absolutely no right to undermine the right of women—to put this discouraging and unique impost on the legal bond of marriage—to brand it as though it were something to be discouraged. I do hope the right hon. Gentleman, when he replies, will do his utmost to avoid that flippancy which he showed in the last Debate on the subject.

Mr. MACQUISTEN: I quite agree with my hon. Friend. No purpose can be served in going before a Royal Commission. The present system is monstrous. The Chancellor of the Exchequer tells us there may be a loss of money. There cannot be any loss of money in it. He is to get his Income Tax. It would be exactly like those cases in the country where you have a high valuation and low rates, and a low valuation and high rates. The tax will fall upon somebody's shoulders. It all depends on the incidence of the taxation. My Friend has not carried the matter far enough. I think the Clause should have gone to this extent—that when a man is married his income, when it is all his own, should be divided into two. In point of fact, he does divide the income. Sometimes he gives more. It is divided into two, and he should pay on two incomes by right. Similarly, he should be dealt with in accordance to the number of his family. His burden should ho just. The case will fall heavily on those who have not taken on those joyous burdens. Why should we class bachelors as the selfish part of the community? I remember once a conversation in a railway train with a handsome old lady whom I had to see about a certain man. "He is still a bachelor," I said, and she replied, "I cannot stand bachelors. I do not think they are respectable." There is a certain amount of truth in it. This Amendment cannot make any difference in the Income Tax, because the Chancellor of the Exchequer must get his money. It all depends on the incidence. The state of affairs described by my hon. Friend opposite, whereby people are taxed practically double, and the rights of women are de-
feated to this extent, is simply intolerable. It might be possible the Chancellor of the Exchequer would have to raise his tax. I hope not. At all events, the tax has got to be obtained, but there is no reason why there should be a double burden on people who should not be obliged to bear that burden. Therefore, I hope the Chancellor of the Exchequer will agree to this very sound, just, and equitable proposal.

Lieut.-Commander KENWORTHY: I rise to support this Clause, and, in particular, I would like to draw the attention of the Chancellor of the Exchequer to the ease of the naval officer. I believe the defence for this tax is that you have a man with a certain income and a woman with a certain income, and they effect a saving by marrying and living in the same house and having half the expenses. To my mind, it is a weak argument, because it means a large addition to expenses in the course of time. Take the case, particularly, of a naval officer or of men who have to go abroad on business and are always travelling about. Take the case of a man who has to go to India and then has to send his wife and children home, or the case of a man in the Army who spends a good deal of time abroad. These people are distinctly hard hit when the wife has an income if the two incomes are to be put together for the assessment of Income Tax. A naval officer may be abroad for three years. He has to keep up his mess, and at the same time his family has to be kept at home. Yet the Income Tax is based on the double amount of the wife's little income and the husband's small income. The thing is intolerable, and I hope my hon. Friend will divide the Committee if the Chancellor of the Exchequer will not agree to this proposal. I will just give one figure to show how this tax particularly hits the naval officer, although, as I say, there is a large class of people who do not live at home because of their profession or calling. But take the case of a naval officer with an income of £700 a year. He has to pay at least £200 a year for his expenses on board ship. That leaves him with an. income of £500 on which to support his wife and family. Deducting the allowance for children, say, £100, and the abatement of £25 for his wife, and uniform allowance £35, altogether he gets off £230, leaving £470 on which to pay Income Tax at the rate of 1s. 9d., as at present, which comes to £41 2s. 6d. His brother, who has not gone into the Service, and is assessed
on an income of £500, only keeps up one establishment, and is, therefore, on all fours with his brother at sea. But with an income of £500, with allowance for wife and children, and an abatement of £100, pays on £275 at 2s. 3d. He only pays an income tax of £30 18s. 9d., so that the naval officer pays an extra Income Tax over and above his brother or neighbour of £10 3s. 9d. This obviously only hits the married man in this profession. It does not hit the bachelor at all. He spends the whole of his money on himself in most cases. But suppose he marries, and his wife has a small income. The two incomes are put together, and he has to pay at the higher rate. I do hope the Committee will support this altogether just proposal, and that my hon. Friend will force it to a Division, if necessary.

Sir F. BANBURY: I am afraid I cannot agree with the hon. Member for Glasgow (Mr. Macquisten) that as soon as a man is married his income is divided into two. That, I think, is pressing the matter rather too far. But I do agree with' my hon. Friend who moved the Clause that something ought to be done in this direction, and that the argument that the Income Tax Commission is considering whether or not some change ought to be made does not really apply. After all, this House is the body which imposes taxation. We do not want to refer to a Royal Commission the question as to whether or not taxation should be imposed. It is the most ancient privilege of this House, that they should have the power of imposing taxation, and surely they ought to consider, in imposing taxation, whether that taxation is just or right. It does not seem to me to be any argument to say we have not to consider in this House whether a tax is just or right, but whether a Royal Commission are to usurp our function and tell us what the tax is to be. It is a very different thing to suggest how the Income Tax should be levied and collected, but the imposition of this tax ought to be left to this House. We come to the justice of the tax. Is this tax just or not? It may be expedient. It may be putting more money into the pocket of the Exchequer, but that does not prove it is right or just. Many taxes could be devised which would be expedient and put money into the Exchequer, but this tax, if not just and right, ought not to be imposed. It might be held that before the Married Women's
Property Act was passed in 1882, there was something to be said for this tax, because, after all, if the husband had the benefit of the income, as he did before 1882, unless there was a special settlement or something of that sort, it might be said to be just that, having the income, he should pay the tax on it. At the present moment ho has not the income. In many cases he has no means of knowing what his wife's income is, unless she chooses to tell him. It might be quite possible that a wife might have a certain amount of income, and be entitled to the whole of it. The husband cannot claim any of it, and she may invest it or leave it on deposit account unknown to the husband. Yet the husband is penalised if he does not return to the Inland Revenue what the exact income of his wife is, when he has no means of knowing. That is not a very strong reason, perhaps, against the tax, but it certainly is a reason. The real reason, however, is this: I choose to meet a woman whom I know has a certain amount of money, and I choose to disregard the ordinary conventions of life, and I live with her instead of marrying her. I benefit by it in more ways than one. If I change my mind, or if she changes hers, the matter is at an end. I have no doubt that I save money by it. Now, I venture to appeal to my right hon. Friend that he is not entitled to make money out of the morality of two people if they choose to do what I am quite sure my right hon. Friend would encourage, namely, to marry. I do not see why they should be put in any better position. I am not sure that I agree with the argument that a bachelor should be taxed above a married man, but I do say that the married man ought not to be put in a worse position than a man who chooses to live with a woman and not marry her. That is the fact put plainly.
Under these circumstances, and especially in view of the fact—I am sure it would not weigh with my right hon. Friend, though it might weigh with some members of the Government—that there are a large number of hon. Members who oppose this very simple act of justice, and some will have a reminder at the next election, from their female electors—and I shall not be sorry if that is done—I trust something will be done. Let me conclude by asking my right hon. Friend, who has, I am sure, by no means an obstinate
nature, not to consider himself bound by any statement he made before the case was put so ably before him as it has been put by my hon. Friend opposite, but to consider the right and the justice of it. After all, what have we been doing lately? Millions and hundreds of millions do not count. We may be a little short of £50,000,000 or £60,000,000; then we borrow, or issue more currency notes—a very bad thing! But if these things are done for purposes not so wise perhaps as they might be, surely we need not say, because we are going to lose a certain sum of money, that we shall not do an act of justice !

10.0 p.m.

Mr. HAILWOOD: I rise to support the hon. Member for Wood Green who has so very ably put his arguments before the Committee. One point that I think is stronger than perhaps any of the others has not been brought out in the course of the Debate. It arises within, my own knowledge, and I am sure there must be a good many cases in the country on similar lines. I refer to the case where a lady is left an annuity by her father, while at the same time the father knows that her husband is not quite worthy of his daughter, and so ties the money up; she has a life interest solely, paid to her annually, and this ceases at her death or passes to her children. I happen to know the case where after a while the husband and wife have separated, the wife being entitled to draw this annuity. As a matter of fact, the money is invested in mortgages, and the Income Tax is deducted at 6s. in the £ which is returned. The wife, however, being separated from the husband is not entitled to get this money back, but the husband, who is not worthy of his wife, and does not support her, makes application for the return of the Income Tax. You have then the case of the husband actually drawing a return of Income Tax that has been paid on the wife's own money; he has not kept his wife in any shape or form, yet he is entitled to get back from the Government Income Tax which has been unjustly deducted from the income of the wife. That, I think, is a gross injustice. I am sure the Chancellor of the Exchequer has got a sufficiently just mind to say that he is not prepared to tolerate things of that sort. It can only be remedied by assessing the income of the husband and wife as entirely separate. We need not wait for a Royal Commission, for the whole of the House, I am convinced, has made up its mind that
this is an injustice. I hope and trust that the Chancellor will see his way to-night to agree to this Amendment.

Mr. RAWLINSON: I do not propose to repeat arguments that I have stated on various occasions. While on these occasions the Chancellor of the Exchequer has tried to defend the present position, I think he has really done it in a half hearted way. Seriously, surely this is a grievance which should be remedied as soon as possible! On broad principles, the income of husband and wife should be assessed separately, as if they were unmarried people. I do not propose to follow the arguments of my right hon. Friend the Member for the City of London. Apparently, from what he says, it would appear, with his experience on the Dogs Bill and other Bills, that the results for him are worse in promoting Bills than in opposing them. So far as this present matter is concerned, I want to put this very clearly: this is not a sex question in any sense at all; it is equally an injustice upon husband and upon wife. I quite realise what the Chancellor of the Exchequer is bound to say. The difficulty is this: of course, if this Clause be carried, it would mean a tremendous loss to the Exchequer. [HON. MEMBERS: "No, no!"] Obviously it must be so. If it did not, it would not be any use in moving the Amendment. But the greater the loss the greater the amount of injustice that is being done at the present time. I quite realise the extraordinary difficulty of the Chancellor of the Exchequer, for, having made his Budget and put the Income Tax at 6s., or whatever the sum was at the beginning of the year, he may, and very likely will, say, "It is quite impossible for me to accept the Amendment," which will mean the loss of a sum estimated at £1,000,000 or £2,000.000. He may quite fairly say that. If he takes that line, the only hope is that next year— [HON. MEMBERS: "No, no!"] —when he comes to the Budget, he may do something. Meantime, might I suggest that we might get an admission that this is an injustice which will be remedied at some possible time? I hope I shall be able to get that, if nothing better. At some future date I hope this anomaly will be put right once and for all, and that, quite irrespective of the question of sex.

Mr. CHAMBERLAIN: Perhaps I may say a word or two first about the minor matters which have been raised in this dis-
cussion. I am sorry that the hon. Member for Wood Green thought I treated his speech with undue levity on a previous occasion. Perhaps my efforts in that direction have been criticised before, but I think this is the first time I have been accused of undue levity, for the criticism has generally been the other way. I hope under these circumstances my hon. Friend will forgive me, and he will have no occasion to reproach me to-night. The second point of my hon. Friend was a complaint as to the procedure of the Royal Commission in regard to the publication of the evidence, and his inability to obtain a Blue Book in the Vote Office. I have sent to make inquiries, and I find there is no one there who knows anything of the statement made by my hon. Friend. They do not know why copies are not there, and I am making inquiries. I imagine the Blue Book will appear on the Pink Paper, and hon. Members will get this Report in the ordinary course. It is not unusual that the procedure of a Royal Commission comes within the discretion of the Commission itself, and we cannot dictate procedure to them. It is a common practice for a Commission, under such circumstances, to publish evidence from time to time as it goes along.
I turn from these minor matters to the consideration of the larger question. My hon. Friend who moves this new Clause said rightly that this is not a sex question, and he speaks with strong and almost passionate feeling, and quite definitely treats it as a wrong done to him. Whether the law be wrong or not, it is not an injury done to women but to married people, and it affects the husband as much as the wife. My hon. Friend quoted a letter from a surveyor which appeared to indicate that a married woman had no right to that part of the relief, which is applicable to her income, but my hon. Friend knows that that is not so. The surveyor in question evidently made an error, or did not explain the point as he should have done, but I will have his attention called to it, because it was a mistake. The grievance is not that the husband and wife cannot be assessed separately because they can, but if they wish it either of them must ask for it. If the wife is content to be assessed with her husband, and makes no request to be assessed separately, or if the husband wants to be assessed separately, he or she
will have to make such a request. The case may be reversed. If the wife desires to be assessed separately she must make the application; one of them must apply, and there is no differentiation —

Mr. LOCKER-LAMPSON: The husband gets repayment whether he applies or not. In order to get a repayment of the tax overpaid the wife is the only person who has to make the application, and if neither makes an application the husband gets the whole of it.

Mr. CHAMBERLAIN: Really does the hon. Member put that forward as a grievance? Any married woman who desires to have that relief can have it at the asking. Is that really the measure of my hon. Friend's grievance; if so, I really think he stands alone in the House, for it is a trifling matter?

Mr. LOCKER-LAMPSON: It is part of the case.

Mr. CHAMBERLAIN: At any rate, that is not worthy of the passion my hon. Friend has thrown into the matter. He says this is an attack upon married women's property, and he speaks of the Income Tax Act of last year as if it involved some new principle, and laid down some different treatment for married women from anything that had been applied before, and was being applied for the first time, and as if it took away from married women what up to last year they had already got. It is nothing of the kind. The Act of last year was a pure Consolidation Act, and resumed the existing law, and anyone familiar with our procedure knows nothing is more strictly observed than to keep Consolidation Acts purely to consolidation without any alteration of the law. What the Income Tax Acts do which are consolidated is what has been the practice all along, and what was the practice at the passing of the Married Women's Property Act? It was not altered, and it was not thought at the time to be inconsistent with the Married Women's Property Act, and it provided that the property of two married people shall be added together for the purpose of ascertaining at what rates they are to pay the tax. That is what it does.

Sir F. BANBURY: When that was passed there were no graduations in the Income Tax, and therefore there was no penalty put upon them in regard to adding them together.

Mr. CHAMBERLAIN: The same problem arises, but I do not think it arises in the same way. The graduation has enormously Increased.

Sir F. BANBURY: That is no reason for an injustice.

Mr. MACQUISTEN: So that if the Income Tax is small it is on the principle De minimis non curat lex.

Mr. CHAMBERLAIN: Let me deal with the question of principle—not of expediency. Is this inconsistent with the principle of the Married Women's Property Act? It was not thought so by those who passed that Act. My hon. Friend really puts his ease on entirely wrong grounds when he argues it from that point of view. The hon. Member for one of the Divisions of Manchester (Mr. Hailwood) described a particular case. I think it was a case of mistaken law: in my opinion the wife in the case he mentions is entitled to whatever relief is due on her own income. But if the hon. Member will give me particulars of the case I will have them investigated, and will communicate further with him.

Mr. HAILWOOD: The point is that the money is always deducted at 6s. in the £.

Mr. CHAMBERLAIN: As I understand it, the husband is not entitled to any relief in respect of the wife's income; but still if particulars are sent me I will have them looked into. I think the hon. Member will find that the injustice of which he complains is not the effect of the law, but an effect of ignorance. I have endeavoured to persuade the House, in the first place, that this is not a question between sexes, but rather a question between married people and unmarried people. In the second place, I have endeavoured to convince hon. Members that there is no infringement of the Married Women's Property Act whatever. Now I come to the Amendment itself. My hon. and learned Friend says, "Let the Chancellor of the Exchequer change the law, whatever the cost may be, even if it be a question of a £1,000,000." I wish it was only a question of £1,000,000. But in fact it is a question of £20,000,000, and it might easily become double that amount. It means a loss of £20,000,000 to revenue as now distributed, and it is obvious that if you allow the incomes of husband and wife to be separated, and it is found by the couple that they will secure an advantage by separating the incomes, they will do so. That is
why I think the cost of this change might be vastly increased. Let me work, however, on a smaller figure, on what it would cost immediately. Even in these days £20,000,000 of revenue is a rather serious loss for the Chancellor of the Exchequer to face. Where would this relief go? My hon. Friend who moved illustrated his argument by a certain number of cases of people with small incomes —I dare say actual cases. In the great majority of cases where the income is a small one practically the whole of it is earned by one of the parties. In that case there would be no relief. You have to take the case where the income is partly the husband's and partly the wife's to get any relief. That is not the normal case among small Income Tax payers. You would relieve a minority of the small Income Tax payers at the expense of all other Income Tax payers who were not relieved, including those cases of small taxpayers where the whole income was earned by the husband, instead of part earned by the husband and part, in the more normal cases, not earned by the wife but settled on her or her own property from investment. It is rather interesting to see what the relief would amount to on an average among the different classes of taxpayers. The average immediate gain to each couple between £131 and £500 of income would be £4, between £501 and £1,000 it would be £35, and exceeding £50,000 it would be £1,000. It is inevitable that the biggest relief would go to the people with the biggest incomes, and I do not think that in itself is the tendency in Income Tax taxation at this moment. The largest individual relief, which would be £l,000, goes to people with incomes exceeding £50,000. The bulk of the gain is distributed over married taxpayers with aggregate incomes between £500 and £10,000 per annum. This is due to the fact that within those limits the rise is steeper, from 1s. 8d. on an earned income of £500 to 8s. 4d. on an income of £10,000.
But would you get to a system of absolute justice if you accept the principle put forward by my hon. Friend and those who are supporting him? There are anomalies in the present system. You can make play with the fact that two people living together and not married pay less than if they had regularised their position and married, but would you create a fresh anomaly or injustice if you separated the incomes of married people for the purposes of Income Tax? Take the case of a
man and wife with £400 between them. Is there any principle of taxation on which one of them ought to pay more than the other? Yet if the income were earned by the husband my hon. Friend would make them pay more than if half the income came from the wife's and half from the husband's exertions. The Committee must use a little imagination and see the results of a change as well as the hardships of the present situation. The real matter before us is not the separation of the income of the wife from that of the husband, but the question of the taxation of married people and the allowances made for their responsibilities as compared with other people who presumably have not those responsibilities. At present you make an allowance of £25 for the wife in respect of small incomes. You allow a single person £ 130 free of tax, but if the income exceeds £130 you tax them as from £120. Where husband and wife live together you allow an abatement of £25 in respect of the wife. I do not think that is sufficient. I cannot undertake to do very much, but I am prepared to show my sympathy with that hardship without prejudice to what may be done on the general review of Income Tax, when we consider the whole problem—and to recognise it by doubling the wife's allowance. If that commends itself to the Committee I will move on the Report stage to give effect to that change. It may be said that that is too little. I know my hon. Friend (Mr. G. Locker-Lampson) will not accept it. When he introduced the deputation to me he repudiated any compromise or any transaction. He was out for a principle, a principle which I cannot admit, and of which I cannot see the equity, at any rate, for those who are not insisting on the whole principle and nothing but the principle. I submit that this is a reasonable recognition of such difficulties as those with which we are confronted. If they are content to accept it in the spirit in which it is offered, well and good; and if I have failed to satisfy my hon. Friend, I hope I have not done anything to give him unnecessary pain.

Mr. ACLAND: I think the Chancellor of the Exchequer has gone a long way to meet the general feeling of the Committee on this matter. He has shown that he could not accept the new Clause without putting in much greater anomalies than those which exist. It is clearly the fact that there would not only be a definite
loss due to treating the two incomes separately, but there would be all sorts of possibilities in the adjustment.

Mr. CHAMBERLAIN: I repudiate the idea that if Parliament deliberately says that the incomes of the husband and wife are to be treated separately there is anything wrong for any one of us to so divide our income as to pay the lowest tax which Parliament allows us to pay. Parliament invites us to do it, and the suggestion that there would be anything wrong could not be sustained for a moment.

Mr. ACLAND: I do not think that the Committee wants that sort of thing done, and as a certain amount of relief will be given to a comparatively large class it is generally felt that that sort of thing ought not to be done at a time like this. I think that the Committee do feel generally that we wish to avoid having any penalty on marriage, particularly in the case of people with low incomes, and I think, therefore, that the concession which has been forecasted will to a considerable extent, give relief in the case of poor people where there is a penalty at present, on marriage and will go a long way to meet the feelings which the Committee, as a whole, has on this subject. I welcome the concession very much as a real step in advance and a real assistance where assistance is mainly needed.

Mr. LOCKER-LAMPSON: Before the House comes to a decision on this question may I say that, though I am delighted that my right hon. Friend is going to turn the £25 into £50, that does not affect the principle one iota. It does not affect the question of a penalty tax on marriage. It is a very valuable concession, but has absolutely nothing to do with the Clause before the Committee. In regard to evasion, it seems tome that you could perfectly easily, just in the same way as you get over the evasions in the case of Death. Duties, get over evasions in the case of such an abatement as I am asking for by saying that any money handed over by a wife or by a husband within, say, five years of marriage should still be counted as part of the income of the person who handed it over. In regard to the cost, the right hon. Gentleman has tried to make out that if the Clause were accepted people with large incomes would benefit. But I have suggested to the Chancellor of the Exchequer that the
whole of the cost would be taken out of the pockets of the rich people. Therefore that argument, it seems to me, falls to the ground. I only wish that this Amendment had been in the hands of somebody more eloquent and more able, because I am certain of this, that this House sooner

or later will realise the justice of this Amendment.

Question put,
 That the Clause be read a second time.

The Committee divided: Ayes, 66; Noes, 148.

Division No. 72.
AYES.
[10.36 p.m.


Agg-Gardner, Sir James Tynte
Green, J. F. (Leicester)
Raffan, Peter Wilson


Allen, Col. William James
Gretton, Col. John
Rawlinson, John Frederick Peel


Astbury, Lieut.-Corn F. W.
Griffiths, T. (Pontypool)
Richardson, R. (Houghton)


Balfour, George (Hampstead)
Gritten, W. G. Howard
Roberts, F. O. (W. Bromwich)


Banbury, Rt. Hon. Sir F. G.
Guest, J. (Hemsworth, York)
Rogers, Sir Hallewell


Bell, Lieut.-Col. W. C. H. (Devizes)
Guinness, Capt. Hon. R. (Southend)
Roundell, Lieut.-Colonel R. F.


Benn, Com. Ian Hamilton (Greenwich)
Guinness, Lt.-Col. Hon. W. E. (B. St. E.)
Samuel, A. M. (Farnham, Surrey)


Blake, Sir Francis Douglas
Hailwood, A.
Scott, Sir S. (Marylebone)


Bowles, Col. H. F.
Harbison, T. J. S.
Sexton, James


Briant, F.
Holmes, J. S.
Shaw, Hon. A. (Kilmarnock)


Brown, Captain D. C. (Hexham)
Hood, Joseph
Short, A. (Wednesbury)


Campbell, J. G. D.
Hunter, Gen. Sir A. (Lancaster)
Smith, Capt. A. (Nelson and Colne)


Carew, Charles R. S. (Tiverton)
Kenworthy, Lieut.-Commander
Sprot, Colonel Sir Alexander


Clough, R.
Kenyon, Barnet
Thomas-Stanford, Charles


Cowan, D. M. (Scottish University)
King, Commander Douglas
Ward, Col. L. (Kingston-upon-Hull)


Craig, Lt.-Com. N. (Isle of Thanet)
Lane-Fox, Major G. R.
Willoughby, Lt.-Col. Hon. Claud


Davison, J. E. (Smethwick)
Macquisten, F. A.
Wood, Sir J. (Stalybridge and Hyde)


Devlin, Joseph
MacVeagh, Jeremiah
Worsfold, T. Cato


Edge, Captain William
Meysey-Thompson, Lt.-Col. E. C.
Young, Sir F. W. (Swindon)


Entwistle, Major C. F.
Murray, Dr. D. (Western Isles)
Young, Robert (Newton, Lanes.)


Foxcroft, Captain C.
Nall, Major Joseph



Gardiner, J. (Perth)
Perkins, Walter Frank
TELLERS FOR THE AYES.—Mr.


Graham, W. (Edinburgh)
Rae, H. Norman
G. Locker-Lampson and Capt. Craig,


NOES.


Acland, Rt. Hon. Francis Dyke
Gibbs, Colonel George Abraham
Morris, Richard


Ainsworth, Captain C.
Gilmour, Lieut.-Colonel John
Mount, William Arthur


Archdale, Edward M.
Glanville, Harold James
Murray, William (Dumfries)


Armitage, Robert
Grant, James Augustus
Neal, Arthur


Austin, Sir H.
Greenwood, Col. Sir Hamar
O'Neill, Capt. Hon. Robert W. H


Baird, John Lawrence
Griggs, Sir Peter
Parker, James


Baldwin, Stanley
Grundy, T. W.
Parry, Major Thomas Henry


Barnes, Major H. (Newcastle, E.)
Hall, F. (Yorks, Normanton)
Pearce, Sir William


Barnett, Captain Richard W.
Hancock, John George
Pulley, Charles Thornton


Barnston, Major Harry
Harmsworth, Cecil B. (Luton, Beds.)
Purchase, H. G.


Benn, Capt. W. (Leith)
Hayday, A.
Ramsden, G T.


Bentinck, Lt.-Col. Lord H. Cavendish.
Hayward, Major Evan
Ratcliffe, Henry Butler


Blades, Sir George R.
Henderson, Major V. L.
Rees, Sir J. D. (Nottingham, E.)


Brackenbury, Col. H. L.
Henry, Denis S. (Londonderry, S.)
Roberts, Rt. Hon. George H. (Norwich)


Breese, Major C. E.
Hohler, Gerald Fitzroy
Roberts, Sir S. (Sheffield, Ecclesall)


Bridgeman, William Clive
Hope, Harry (Stirling)
Robinson, S. (Brecon and Radnor)


Briggs, Harold
Hope, James Fitzalan (Sheffield)
Robinson, T. (Stretford, Lanes.)


Brotherton, Col. Sir E. A.
Hope, John Deans (Berwick)
Sanders, Colonel Robert Arthur


Bull, Right Hon. Sir William James
Hopkins, J. W. W.
Seager, Sir William


Cairns, John
Hopkinson, Austin (Mossley)
Shaw, Captain W. T. (Forfar)


Carter, W. (Mansfield)
Horne, Edgar (Guildford)
Shortt, Rt. Hon. E. (N'castle-on-T., W.)


Casey, T. W.
Howard, Major S. G.
Smith, Harold (Warrington)


Cecil, Rt. Hon. Evelyn (Aston Manor)
Hughes, Spencer Leigh
Smithers, Alfred W.


Chadwick, R. Burton
Jephcott, A. R.
Stanier, Captain Sir Seville


Chamberlain, Rt. Hon. J. A. (Birm., W.)
Jesson, C.
Stanley, Colonel Hon. G. F. (Preston)


Chamberlain, N. (Birm., Lady wood)
Jodrell, N. P.
Stephenson, Colonel H. K.


Coates, Major Sir Edward F,
Johnson, L. S.
Stewart, Gershom


Colvin, Brigadier-General R. B.
Johnstone, J.
Sugden, W. H.


Cope, Major W. (Glamorgan)
Jones, Sir Edgar R. (Merthyr Tydvil)
Sutherland, Sir William


Courthope, Major George Loyd
Jones, J. Towyn (Carmarthen)
Swan, J. E. C.


Craig, Col. Sir James (Down, Mid.)
Jones, Wm. Kennedy (Hornsey)
Sykes, Sir C. (Huddersfield)


Davies, Alfred Thomas (Lincoln)
Kellaway, Frederick George
Terrell, Capt. R. (Henley, Oxford)


Davies, T. (Cirencester)
Knights, Capt. H.
Thomas, Brig. Gen. Sir O. (Anglesey)


Dawes, J. A.
Law, A. J. (Rochdale)
Tootill, Robert


Dean, Com. P. T.
Law, Right Hon. A. Bonar (Glasgow)
Vickers, D.


Doyle, N. Grattan
Lewis, T. A. (Pontypridd, Glam.)
Waddington, R.


Du Pre, Colonel W. B.
Locker-Lampson, Com. O (Hunt'don)
Walker, Col. William Hall


Edgar, Clifford
Long, Rt. Hon. Walter
Wallace, J.


Elliott, Lt.-Col. Sir G. (Islington, W.)
Lort-Williams, J.
Walsh, S. (Ince, Lanes.)


Eyres-Monsell, Commander
Lunn, William
Weston, Colonel John W.


Falcon, Captain M.
Mackinder, Halford J.
Wheler, Colonel Granville C. H.


Fell, Sir Arthur
M'Laren, R. (Lanark, N.)
White, Col. G. O. (Southport)


Fisher, Rt. Hon. Herbert A. L.
McNeill, Ronald (Canterbury)
Whitla, Sir William


Forestier-Walker, L.
Mitchell, William Lane-
Wignall, James


Fraser, Major Sir Keith
Mond, Rt. Hon. Sir Alfred Moritz
Williams, Lt.-Com. C. (Tavistock)


Gange, [...]. S.
Moreing, Captain Algernon H.
Williams, Col. Sir R. (Dorset, W.)


Wills, Lt.-Col. Sir Gilbert A[...]n H.
Wilson-Fox, Henry
Worthington-Evans, Rt. Hon. Sir L.


Wilson, Rt. Hon. J. W. (Stourbridge)
Wood, Sir H. K. (Woolwich, W.)



Wilson, Colonel Leslie (Reading)
Wood, Major Mackenzie (Aberdeen, C.)
TELLERS FOR THE NOES.—Lord E.


Wilson, W. T. (Westhoughton)
Woolcock, W. J. U.
Talbet and Mr. Dudley Ward.


Question put, and agreed to.

NEW CLAUSE.—(Amendment of Law as to Separate Assessment of Husband and Wife.)

The sixth day of July shall be substituted for the sixth day of May in Section eight of the Income Tax Act, 1918, and in rule seventeen of the General Rules as the date before which an application for separate assessment of husband and wife must be made under those provisions; and an application for the purposes of those provisions may in the case of persons marrying during the course of a year of assessment be made as regards that year at any time before the sixth day of July in the following year; and those provisions shall have effect accordingly.— [Mr. Locker-Lampson.]

Brought up, and read the first time.

Mr. LOCKER-LAMPSON:: I beg to move,
That the Clause be read a second time.
I understand that the Government are willing to accept this Clause. Its purpose is to enable a woman to get the advantages of this Amendment even though she applies after the 6th May.

Mr. BALDWIN: I have not myself had an opportunity of examining the wording of this Clause, but of course if it has been agreed between my hon. Friend and the Chancellor of the Exchequer I am prepared to accept it.

Mr. LOCKER-LAMPSON: Perhaps I may explain that the wording of this Clause has been agreed between the Chancellor of the Exchequer and myself.

Clause accordingly read a second time, and added to the Bill.

Motion made, and Question
That the Chairman do report Progress, and ask leave to sit again."—[Mr. Chamberlain.!] put, and agreed to.

Committee report Progress; to sit again To-morrow.

The remaining Orders were read and postponed.

Orders of the Day — SECONDARY SCHOOL GRANTS (REGULATIONS)

Motion made, and Question proposed,
That this House do now adjourn."— [Colonel Sanders.]

Captain LOSEBY: I regret that I have chosen such an inconvenient time and occasion to call the attention of this House to a matter which has been for some time upon my mind. I should not have done so had I not exhausted every other means at my disposal for calling attention to a matter which I think is important, and. if it were not that I thought an important principle was involved. I am raising a point which is, I think, one of vital importance to those of us who believe earnestly, as I believe, in democratic principles. I am raising a question which I believe would, if it were widely known to the hon. Members of this House, prove of interest. It affects the educational policy of the right hon. Gentleman the Minister of Education. For two and a half months from time to time I have put questions to the right hon. Gentleman, and they were on the list No.120 or No. 130, and I have not been able to put them orally, which would have enabled me to meet, if I may say so without offence, the rather vague replies that I received. I have tried to get this matter ventilated in the Press, because I believe it is important, and I have tried to raise it in Debate, but have not been successful. I believe a vital democratic principle is involved. [An HON. MEMBER: "What is the principle?"]I refer to certain Regulations that have come into force for 1919, the Secondary Schools Grants Regulations, which affect the whole principle and policy of subsidising secondary schools throughout the country—

Notice taken that forty Members were not present; House counted, and forty Members not being present,

The House was adjourned at Five minutes before Eleven o'clock